Restitution is considered a possible alternative to overcrowding in prisons. In 1985, the California Youth Authority formed working groups to redefine the Youth Authority's mission to include a concern with victims and to develop policies to enable the collection of financial restitution. Restitution projects were attempted in both institutional and parole settings. The Stockton pilot project is the case study analyzed. The pilot project was a failure, and the various reasons are discussed. A major implication for program development and policy change is that apparent reforms may simply be used to strengthen a punitive agenda unless new programs replace current practices, rather than incorporate existing sanctions. 8 notes and 38 references (Author abstract modified)