Information Asymmetry in Private Prison Management : Monitoring and Oversight As the Basis for Private Prison Legitimacy

The most pressing concerns about outsourcing governmental functions can be resolved through more robust and innovative systems to monitor and oversee government contractors. While this argument applies to all governmental functions, the author uses private prisons as a test case. We can articulate the central problem with outsourcing governmental functions by placing greater emphasis on how monitoring and oversight could allow for the legitimacy of delegating a core government function to a private company. To highlight the relationship among legitimacy, monitoring, and oversight, this Article refocuses the legitimacy debate away from moral arguments and toward solutions grounded in agency theory. If we think of a legitimate private prison administrator as one that has overcome agency problems, procurement professionals could then identify clear solutions to problems stemming from outsourcing prison administration. Acquisition planners can draw on these insights as well as those available to them from data science, managerial science, and principles of contract formation. Although this Article refocuses the legitimacy debate away from moral arguments, it preserves a critical feature of any moral argument: its ability to override considerations of comparative efficiency. Clearly, current and unaddressed failures in oversight and monitoring provide stronger reasons to not outsource prisons than the possibility that they are less expensive and more efficient