It would be foolish to ‘hand over’ our prisons to the private sector. The reason: Regulatory Capture.
This is one of two pieces in a double-header on privatising prisons in India. Read Mohit Satyanand’s counterview here.
These days, the NITI Aayog cannot see a thing that it doesn’t want to privatise. Whether it is healthcare or airlines, the one stop solution seems to be hand over the task to the private sector. It was perhaps not too much of a surprise when Amitabh Kant, the NITI Aayog CEO recommended that “jails, schools and colleges” also be “handed over” to the private sector. The choice of the metaphor suggests that he isn’t talking about allowing private entities to perform these functions alongside government but for government to totally get out of running prisons, schools and colleges (it may not be pure coincidence that he used these three in the same breath).
Kant never really laid out why he thinks so, but the content of the rest of the speech and the NITI Aayog’s recent moves suggest that privatisation is considered a one-shot panacea for everything with Government in India. There’s no real analysis of the merits and drawbacks of involvement of the private sector in any given sector. Not that there haven’t been attempts at involving or “handing over” different sectors of the economy to the private sector in India or elsewhere but privatisation seems more dogma than rationally well-thought-out policy.
While Kant did not elaborate on the specifics, it is possible he was suggesting that the private sector run for-profit prisons where the government sends convicts to serve out their sentences – something that has been tried in the United States and generally shown to be disastrous for all except shareholders of such companies. A recent memo of the US Department of Justice had this to say about private prisons being used by the Federal Government:
Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’ s Office of lnspector General, they do not maintain the same level of safety and security. The rehabilitative services that the Bureau provides, such as educational programs and job training, have proved difficult to replicate and outsource- and these services are essential to reducing recidivism and improving public safety.
This memo was accompanied with steps to end the contracts with private prisons or limit their use dramatically. Three states in the United States and Canada having had bad experiences with privatising prisons have either banned them or eventually taken them back under State control.
Broadly, there are two solid objections to privatising prisons: that it amounts to divesting the state of its core functions (the Israeli Supreme Court for instance found that a law allowing private prisons was unconstitutional for this reason), and the high possibility of regulatory capture. In this piece, I would like to discuss the latter in some depth.
Regulatory Capture
The bugbear of privatisation in India – and pretty much everywhere else in the world – has been regulatory capture. It is the process by which the regulator, which is supposed to regulate entities in public interest, ends up working for the regulated entities and against public interest. Coined by Nobel prize winning economist, George Stigler, the concept helps explain a lot of diverse things that have gone wrong, such as why the Challenger shuttle blew up and why the Noida DND toll would’ve been payable for all eternity until the Allahabad High Court stepped in and struck it down.
One of the checks against regulatory capture is to have multiple stakeholders who can balance out the power of the regulated entities and ensure that decisions are taken in public interest. Think of the time when TRAI (a body that is often in the pockets of telecom companies) listened to consumers and came out with regulations protecting net neutrality.
Were prisons to be privatised, the main “consumer” (the relevant government) would also be the regulator. The socio-economic profile of prisoners and the fact that they’ll be under the total control of the contractor as prisoners means that they will not have any meaningful say in how prisons are run. All of this suggests that the situation is ripe to have prisons purely for the profit of their owners and in active detriment to public interest.
The “Kids for cash” scandal serves to illustrate what happens when prisons suffer from regulatory capture. Two judges in Luzerne County, Pennsylvania were found to have taken bribes from a private prison contractor to sentence juvenile offenders to be detained in facilities run by this contractor for trivial offences, practically without trial. Over two thousand juveniles in Philadelphia were sentenced by the two judges, all of whose sentences were struck off the record when this came to light.
Of course, should prisons be privatised in India, we may not need to worry about such a scandal. The judges would never be caught.
Indian jails suffer from over-crowding, inhumane conditions and routine brutality. This was brought to the fore by the Byculla prison murder, which if it weren’t for the fact that “celeb” inmate Indrani Mukherjee was in the same prison and may have been part of the prisoners’ riot sparked off by the murder, may have gone entirely unnoticed in the media. Like the police, the prison system continues to be a colonial institution designed to intimidate and invoke fear in the populace rather than be places where criminals are reformed.
Indian prisons are overcrowded and filled with under-trials from poor and discriminated sections of society. They are where those who can’t afford bail or navigate the legal system go to be forgotten by everyone else. They were part of the colonial architecture (literally and metaphorically) that India’s ruling elite never got around to dismantling on the quest to build a more just and equitable society. It’s a shame that far from talking of ways to change our prisons to make them reformatory institutions, the idea seems to be to stop caring and make more money off it.
