I think private prisons could work if: - Convicts could choose whether to be sent to a public or private prison. - Private prisons had financial incentives for post-incarceration behavior. Eg: If their prisoner recidivism rate after 3 years was 10% lower than the average public prison, they would get a 20% bonus. Those changes would create enough competition and align incentives such that we could see some real innov…
You we trying to optimise out the 'inefficient' government, by saddling it with much effort designing incentives and making sure they are not abused. You might as well run prisons yourself - publically.