Just a quick link here to an awesome Fortune Magazine article on private prisons, discussing how, aside from the fact that private prisons haven't been proven to save money in operations, they can wind up costing states far more than anticipated in the long run due to the plethora of problems that seem inherent to their operations. Most noticeably, they hire non-union guards at lower rates and tend to not abide by government regulations on construction or training, so they have facilities of poorer quality than public prisons and guards who are less qualified. Further, the lack of educational and vocational programming at private prisons tends to increase the rates of recidivism of those leaving, which levies a heavy toll on society as prisoners held in private prisons are more likely to engage in criminal activity after they're released.
On top of the fact that private prisons often wind up costing the towns or states they contract with more than government-run institutions, they rarely are subject to the same sorts of oversight found in government-run prisons. So while they perform an inherently governmental function, the private prison industry is capable of circumventing the oversight applied to every other government entity. As the Attorney General of Arizona said, "They don't have to show proof of financial responsibility, they don't have to comply with Arizona prison construction standards, they don't have to report disruptions. . .and both the training and staffing is up to the private operator." Great!
But this article, and a lot of the recent firestorm in Arizona, really arose over the question of accountability; namely, whose responsibility is it that 3 murderers escaped from a private prison. Well MTC, the company that operates the prison, has effectively claimed it's not responsible, and politicians in Arizona are all pointing fingers at one another and the DOC over the fact that these murderers were housed in a medium security facility to begin with. But all that does is ignore the most pressing concern; that private prisons are accountable to their stake/stockholders, and no one else, not the citizens, taxpayers, or even politicans who blindly or unwittingly support them. The bottom line is that private prison companies can afford to let an inmate or two escape from their prisons, so long as the escapes don't happen frequently enough to threaten the contracts they continue to secure through their political influence. To quote the AZ Attorney General again, "A private company has an acceptable level of loss. In the case of violent offenders, I don't believe the public does or should tolerate any incidence of failure." I couldn't agree more.