By reviewing the history, rationale, current scope, and operational performance data generated by privatized prison facilities over the past 15 years, the author presents a synopsis of issues relevant to prison privatization in the 21st century. The private operation and management of prisons has occurred in three key areas: the private financing and construction of prisons; private industry involvement inside prisons, particularly in the provision of services to inmates and in the use of inmates as laborers; and the private management, construction, and operation of entire prison facilities by independent contractors. This chapter focuses on issues related to the latter form of privatization. As of December 1999, 13 private contractors were operating adult correctional facilities in the United States, with a total inmate population of nearly 140,000. The two largest of these, Corrections Corporation of America and Wackenhut Corrections Corporation, together held 80 percent of the total number of inmates housed in private facilities. A significant issue in the privatization of prisons is whether they can be operated more cheaply than State prisons while still achieving comparable performance. The available evidence on the cost-effectiveness of privatized construction of prison facilities strongly suggests that there are indeed significant cost savings produced when private companies contract with jurisdictional entities to build a prison facility. Performance issues are difficult to address, since private corporations contract primarily for those inmates that are the easiest and therefore the cheapest to manage, i.e., minimum-medium security populations. Many prison privatization critics have also issued warnings against the possibility of jurisdictions becoming "captive" to prison service vendors, as a jurisdiction becomes overly dependent on a given corporation for services. Under conditions in which competition among vendors is limited, so are customers' options. Other issues discussed pertain to the moral, racial, and ethical implications of privatization; contract and monitoring; the high turnover of staff; and the extent to which a State may constitutionally delegate its authority to punish those who violate its laws. 41 references