Governmental programs rarely have an inherent regulator that indicates when an activity has ceased to be productive, could be made more efficient, or should be replaced by another activity. In the private sector, businesses rely on profits and competition to furnish such needed incentives. This contrast between incentives for efficiency and productivity between the private and public sectors has encouraged the movement toward privatization in corrections. Social problems and public policy problems, however, are more pluralistic and ill-defined than the delivery of products or services for profit in the private marketplace. It may be that profitmaking and efficiency are not valid measures of effectiveness in corrections when public policy goals are at issue. The private sector in corrections will also have a problem with the concept of vicarious liability litigation. Section 1983 liability claims are running into the billions. Another area of legal vulnerability for the private sector is the first amendment right of inmates. There is no precedent as yet established regarding private operations. Because of high liability insurance premiums, the concept of risk management and risk assessment will be paramount concerns for the private sector in corrections. Overall, there is no empirical data that suggests privatization in corrections is or could be as effective or more effective than current public sector operations. Further experimentation is required. 2 references