Privatization and the Law and Economics of Political Advocacy, Part 9 -- Conclusion:

This is the concluding post in my series on my upcoming Stanford Law Review paper on Privatization and the Law and Economics of Political Advocacy (see here for the technical paper). (See here and here for the introduction.)

We're back to talking non-technically, so you may want to tune back in if you tuned out when I started explaining the technical curlicues of the model. If you find yourself questioning some of the results, you may want to refer back to previous posts, in particular the third post, which describes the basic model.

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I have explored how privatization affects the amount, or effectiveness, of economically self-interested pro-incarceration advocacy. For purposes of this Article, I have so far assumed, with the critics of prison privatization, that such advocacy is undesirable. But this assumption is highly questionable.

For one thing, members of an industry, whether public or private, who advocate a policy that benefits them are not necessarily motivated by self-interest, even unconsciously. When Don Novey, the president of CCPOA, says he just wants to lock up scumbags, perhaps we should take him at his word. The same goes when a DOJ official speaks of the need to fight "the scourge of child pornography," when CACI says terrorism is "heinous," when a leading environmental citizen-suit litigator argues against weakening the environmental laws whose monetary penalties fund its operations, or when doctors who perform abortions oppose abortion restrictions.

People who advocate a policy that benefits them or their industry may be acting out of naked self-interest; they may be deluded into believing their particular interest is the general interest; their participation in an industry may lead them to rightly appreciate their industry's contribution to the public interest; they may have joined the industry because they were sympathetic to its interests; or maybe they just coincidentally believe that the policy is right.

Nor is even nakedly self-interested advocacy an obvious evil, even when prison policy is at stake. From a procedural perspective, some argue that optimal criminal law should reflect all interests, including the benefit to the criminal of committing the crime; and if this is right, prison providers' self-interest is also relevant. Moreover, some see lobbying as a means by which groups provide their views to decisionmakers and the public and thus enrich democratic debate. Others may find it illegitimate, on democratic grounds, to even consider the substance of people's future political advocacy in deciding whether to privatize.

And from a substantive perspective, if criminal policy should be judged by a substantive external standard—for instance, whether sentences are too long in an objective sense—one cannot object to pro-incarceration advocacy on criminal-law-specific grounds without first establishing that such advocacy would move criminal law in a substantively undesirable direction.

Nonetheless, if one believes that the effect of privatization on pro-incarceration advocacy is relevant, this Article has pointed out the inadequacies in the current formulation of the political influence challenge to privatization. My opinion, based on the above theory and evidence, is that privatization will probably not worsen any political influence problem, and may alleviate it. The public goods model seems to describe many situations of political advocacy fairly well. The assumption of the principal model—that the probability of getting a policy change only depends on the total amount spent—likewise seems to describe many situations, like initiative or election campaigns.

There's always room for more realistic theories—for instance, my analysis of what motivated public-sector unions, while common in the labor economics literature, is highly simplified; in assuming that private prison firms were profit-maximizing, I suppressed any analysis of agency costs within the firm; and my back-of-the-envelope estimate of the benefit of incarceration to the different sectors was just that—an estimate. Nor have I entertained the possibility that, when privatization is on the agenda, prison system actors spend more resources fighting over that, which might crowd out pro-incarceration advocacy. So my specific conclusions here are tentative.

But what is not tentative is that this sort of analysis is necessary if one is to make the political influence argument properly, whether in the prison context or more generally. General assumptions will not do. As Mancur Olson (somewhat hyperbolically) observed, "the customary view that groups of individuals with common interests tend to further those common interests appears to have little if any merit." Critics of privatization who have charged that privatization has increased (or will increase, or runs a substantial risk of increasing) industry-expanding advocacy have not explained what it is about the lobbying world that would make this happen. Either they are unambiguously wrong, or they are only right under a particular set of empirical assumptions that they must spell out.