Do Private Prisons Raise Incarceration Rates?

Abstract: The emergence of the private prison system in the U.S. in the mid-1980s was followed by an unprecedented increase in incarceration rates. In this paper, we investigate to what extent the latter was caused by the former. Combining a novel geo-located panel-set of private prisons with circuit-court panel data on sentencing behavior, we ask whether the construction of a new private prison (or the privatization of a public one) changes the sentencing behavior of neighboring courts. We use rich auxiliary cross-sectional variation in how judges are appointed or elected and time-series variation in judges’ electoral and appointment cycles to pin down likely mechanisms by which the private prison industry influences sentencing behavior.