Correctional privatization introduces a vendor's private financial interests into public policy processes, adding profit, economic rationality, and corporate survival to the other interests common to both private and public organizations. Several questions should be seriously considered before privatization decisions are made: What are the limits of privatization? Is it consistent with long-term public interests? How can it be guided to lessen the risk of private abuses? and What conditions should be imposed to manage the risks of abuse? Correctional privatization offers efficient, cost-effective correctional services that are highly responsive to demand. However, private interests may work to create or increase demand out of desire for economic gain. The risks of abuse may be reduced by protective strategies that define the limits of contractor involvement in correctional policy, provide for contract monitoring, retain some level of governmental operation, and maintain the technical expertise to allow independent assessment of policy alternatives. Public policymakers need to recognize that jail and prison privatization is at best a short-term strategy that may help meet immediate demand for more confinement space. Figure, notes