Better Jails

My AFR oped today is on prison reform. You can’t put acknowledgements in an opinion piece, but the piece owes a substantial debt to Justin Wolfers, who first suggested the idea of smarter prison contracts about 7 years ago, when we were strolling the streets of San Francisco together. I’m also very grateful to a senior criminologist who took the time to discuss the contents, but who probably doesn’t want to be named here. ANU PhD student Daniel Suryadarma did a great job tracking down all the relevant statistics for me.

Full text over the fold.

Prison Reform Hard Labour, Australian Financial Review, 17 November 2009

It’s a set-piece of every Hollywood movie featuring an ex-con. A clean-shaven man walks out the prison gate carrying his possessions in a box under his arm, and puts his hand up to shade his eyes from the unfamiliar glare of the sun.

In 2009, over 20,000 Australians got a ‘get out of jail’ card, and walked through the gates of one of the 120 or so prisons dotted across the country.

But the sobering fact is that during the next two years, nearly half of them will have been sent back. Some will get to play that prison release scene again and again.

Prisons do reduce crime, but mainly because of what criminologists call ‘the incapacitation effect’ (when you’re doing time in Long Bay, it’s harder to hotwire a car). There may also be some deterrence effect, but this is small by comparison. And there is little evidence of a rehabilitation effect.

Why are prisons less a portal to a new life than a revolving door? Part of the problem lies in the fact that politicians and public servants have few incentives to create better rehabilitation programs. A policymaker who creates a cutting-edge program to improve inmates’ sense of self-worth risks being ridiculed by the shock jocks. A politician who advocates work release programs must worry about the tabloid headlines if some inmates abscond.

To encourage innovation, we should start publicly reporting the outcomes that matter most. Rather than merely telling the public how many people are held in each jail, governments should publish prison-level data on recidivism rates and employment rates.

Just as with schools and hospitals, ‘prison league tables’ would need to take account of each institution’s caseload. Effectively, such comparisons should aim to answer the question: given the mix of inmates they handled, which prisons did the best job? Carefully constructed prison league tables should give taxpayers and policymakers a strong sense of where innovation is occurring in the system, and help smarten up the criminal justice debate. (A similar approach could also be taken in the case of community corrections programs, which handle about twice as many people as jails.)

As well as focusing on the important outcomes, Australian states should rethink the contracts they write with private providers. At present, about 16% of inmates are held in a private jail. Unfortunately, the contracts for private jails bear a remarkable similarity to sheep agistment contracts.

Providers are penalised if inmates harm themselves or others, and rewarded if they do the paperwork correctly. Yet the contracts say nothing about life after release. A private prison operator receives the same remuneration regardless of whether released inmates lead healthy and productive lives, or become serial killers.

A smarter way to run private jails would be to contract for the outcomes that matter most. For example, why not pay bonus payments for every prisoner who holds down a job after release, and does not reoffend? Given the right incentives, private prisons might be able to actually teach the public sector a few lessons on how to run a great rehabilitation program.

According to the Productivity Commission’s annual Report on Government Services, states and territories have formally agreed to ‘Provide program interventions to reduce the risk of re-offending’. Yet the reality is that less than one-third of prisoners are engaged in any formal education program, and that many of the jobs done by inmates do not provide the skills required by the regular labour market.

Given that each prisoner costs the taxpayer about the same as a five-star hotel room, reducing recidivism rates has a direct benefit for all of us.

But criminal justice – and particularly juvenile justice – is also the pointy end of social policy. Ex-prisoners are disproportionately high users of other government services, such as counselling and income support. So improving corrective services helps in other social areas as well. This particularly affects Indigenous Australians, who comprise one-fortieth of the general population, but one-quarter of the prison population.

As a nation where a convict ancestor is a badge of pride, Australians know better than anyone that life can have a second act. The challenge today is to encourage our corrective services to correct, not just punish. Can we make jail work?

Andrew Leigh is an economist in the Research School of Social Sciences at the Australian National University.

A footnote for the data wonks: so far as I can tell, there are no publicly available estimates on prisoner releases from jail. However, we do know the annual number of new entrants, and if the total isn’t rising, the inflows must equal outflows. In 2007 and 2008, “Sentenced Prisoner Receptions into full-time custody” were 27,000 and 29,000 respectively; while the prison population was 27,000 in both years. Although this implies an exit rate closer to 30,000 per year, I use “over 20,000” because of the possibility that some people enter/exit more than once in a given year.

(xposted at

Update: Michael Pascoe in the Age likes the idea (headline: “Shock! Economist Has Really Good Idea”)

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3 Responses to Better Jails

  1. ChrisPer says:

    I know its hard to avoid oversimplifying in 6-800 words, but it seemed to me the article entirely missed the question of motivators for the criminal class – you know, the ones whose behaviour we are trying to change?

    Criminal actions are usually based on rational (but often short-sighted or badly thought out) benefit-cost patterns. Behaviour changes that reduce recidivism are closely associated with either getting older and leaving the highest-risk demographic, or ‘seeing the light’ in some way that they convert to building a new life track. Its hard to imagine manipulative and exploitative criminals getting behind a scheme that offers private prison shareholders slightly higher risk and somewhat improved dividends!

  2. Don says:

    “… why not pay bonus payments for every prisoner who holds down a job after release, and does not reoffend?”

    I’m not sure how this works. If 50% of prisoners don’t reoffend within the period, then the vast majority of ‘performance based payments’ flow to prison administrators at no additional cost.

    They really are BONUS payments!

    After they’ve harvested their free bonus payments, the cost to prison administrators of each additional payment is likely to rise steeply. The first additional payment might cost hundreds of dollars and the last hundreds of thousands of dollars.

    As a purchaser, how would you set the level of the payments? Would you pay different amounts for different types of prisoner? And do we have enough data on prisoner profiles and outcomes to get the payment levels right?

    An alternative might be to contract prisons (crime management organisations- CMOs?) to take responsibility for managing offenders for a 10 year period.

    If the person ends up in prison after their first sentence then the CMO foots the bill even if it’s substantially more than the contracted amount for that offender. If they don’t, then the CMO has a surplus they can invest in other offenders or take as profit.

    Policy makers would go into the marketplace and ask potential CMOs to tender. Providers would name the amounts they’re willing to accept to take prisoners with particular profiles.

    While private prisons and performance based payments are interesting to theorize about, I’m not convinced they’re good policy.

  3. For a start prisons could improve access to external university studies by inmates. At Deakin we find many obstacles.

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