The experience of service privatization in developing countries : the case of South Africa's PPP prisons.
Privatization, and particularly privatization of services, is a worldwide trend that has grown tremendously over the past 25 years. This growth has been particularly pronounced in developing countries in recent years. Prison services is one of many sectors that has contracted with the private sector, however, until South Africa outsourced the design, construction, finance, and operation of two maximum security prisons to the private sector for a period of 25 years, private prison companies were only involved in some developed countries. Many argue that the sector's involvement in South Africa signals its intention to expand throughout the developing world, and undoubtedly, South Africa's experience will be influential in the future growth of this sector in such countries. This paper aims to explore the experience of South Africa's public-private partnership (PPP) prisons thus far, within a context of international and domestic service privatization, in order to identify key trends and issues which may be relevant to future private sector involvement in prisons and other service sectors. Research was conducted qualitatively, with a total of 12 interviews carried out telephonically and in person. Respondents included members of the government, PPP prison administrations, and members of civil society in order to gain as wide a perspective as possible. An extensive review of the literature, as well as relevant government sources, was also undertaken. While these prisons have certainly brought benefits to South Africa's correctional service, a number of key concerns about private sector involvement in service provision were identified through this research. Firstly, the whole experience, starting with the initial decision, has lacked transparency and debate. Although contracting with the private sector was supposed to lead to increased efficiency and reduced cost, the prisons have, in fact, led to unexpected high costs and risks for the DCS. Furthermore, private sector involvement has led to a tiering of prison services, with PPP prison services generally much better than the public sector. Finally, the research indicates that there are serious questions to be raised about the effectiveness of the regulation of this sector and whether PPP prison companies are truly being held accountable by government.