The Economics of For-Profit Prisons

(Photo: Ken Mayer)

The Times-Picayune reports on Louisiana’s prison ecosystem — and the perverse incentives for sheriffs to keep inmate numbers high:

Louisiana’s incarceration rate is nearly triple Iran’s, seven times China’s and 10 times Germany’s.

The hidden engine behind the state’s well-oiled prison machine is cold, hard cash. A majority of Louisiana inmates are housed in for-profit facilities, which must be supplied with a constant influx of human beings or a $182 million industry will go bankrupt.

Several homegrown private prison companies command a slice of the market. But in a uniquely Louisiana twist, most prison entrepreneurs are rural sheriffs, who hold tremendous sway in remote parishes like Madison, Avoyelles, East Carroll and Concordia. A good portion of Louisiana law enforcement is financed with dollars legally skimmed off the top of prison operations.

If the inmate count dips, sheriffs bleed money. Their constituents lose jobs. The prison lobby ensures this does not happen by thwarting nearly every reform that could result in fewer people behind bars.

The article has some excellent infographics, including one that shows world and state incarceration rates.

(HT: Katherine Wells)

Oh well

Only the guilty are incarcerated

Mike B

Only the state taxpayers are on the hook.


Seems like a rather large conflict of interest.

Yes, only the guilty are locked up, but then you probably break a law every day...


You break several, if you believe a study I read some months ago, unfortunately, too many months ago for me to remember where or post a link. And most of them are actually felonies.

Joel Upchurch

It looks to me like the people in Louisiana are getting a bargain. The article mentions that the state pays $24.39 a day for each inmate. In California, they pay $129.04 a day. I suspect that prison guards aren't unionized in Louisiana.

Joel Upchurch

I did some more checking and California has 170,000 inmates. The could save 6.5 billion a year by sending their prisoners to Louisiana.

Paul Walker

Surely the problem here is not for-profit prisons but the fact that sheriffs are allowed to vertical integrate into the prison system.

Michael Peters

This only moves the problem down. If sheriffs can't directly own stock in these prisons, then maybe they become lobbyists for the prison industry after their terms are up if they've been favorable to that industry. Or maybe that industry will donate heavily to sheriff candidates that favor overly strict laws and overly harsher sentences.

I just don't see how a system where corporate profits are derived by the number of people in jail won't create perverse incentives.

Bill Harshaw

The David Simon/Eric Overmyer series, Treme, used this as an element in one plotline in Season 1.


Explains much, mostly why it's sheriffs (and the Right) that so vehemently oppose any reduction in sentences or decriminalization of anything.


I think all these Huge Revelations about the world legal system can hardly be drawn from one Massively Screwed Up system where Boss Hog has a personal tax on moonshine.

Confl-hick of interest, that's all you can learn here.

Malice in Wonderland

Spelling Mr. Hogg's name with one g is a felony in at least 7 parishes. A warrant has been issued for your arrest.

The Sheriff's Office


I'll bet you're referring to show that John Stossel did where he described the fact that federal regulations were growing by hundreds of thousands of pages each year and the impossibility of following or even being aware of each and everyone of them


Old news. If you want new news google "The dentist man got me" to find out how the poor continue to be exploited with funds confiscated from the middle to the benefit of the few or the one (percent).

Mike Fladlien

how does the crime rate in louisiana compare with surrounding states and california?