THREE PRINCIPAL STUDIES WERE CONDUCTED TO DETERMINE THE MOST COST-EFFECTIVE SIZE FOR CANADIAN MAXIMUM AND MEDIUM SECURITY INSITITUTIONS: (1) A STUDY OF THE COSTS OF OPERATING VARIOUS SIZES OF CANADIAN FULL-PROGRAM MAXIMUM AND MEDIUM SECURITY INSTITUTIONS, (2) AN ANALYSIS OF THE COMPARATIVE SUCCESS OF ONE SMALL AND ONE LARGE MEDIUM SECURITY FACILITY IN ACHIEVING CORRECTIONAL GOALS, AND (3) A SURVEY OF INTERNATIONAL LITERATURE OF THE COMPARATIVE SUCCESS OF SMALL AND LARGE MEDIUM AND MAXIMUM SECURITY INSTITUTIONS IN ACHIEVING CORRECTIONAL GOALS. FINDINGS SHOW THAT IN CANADA, A FULL-PROGRAM MAXIMUM SECURITY INSTITUTION BUILT AND OPERATED AT PRESENT STANDARDS WILL COST ANNUALLY ABOUT 60-PERCENT MORE PER INMATE IF IT IS SMALL (162 INMATES) THAN IF IT IS LARGE (428 INMATES). A SMALL (168 INMATE) MEDIUM SECURITY INSTITUTION WILL COST ABOUT 40-PERCENT MORE PER INMATE THAN A LARGE ONE (420 INMATES). IN COMPARING THE SUCCESS IN REACHING CORRECTIONAL GOALS OF SMALL AND LARGE INSTITUTIONS, SUCCESS WAS DEFINED AS MAINTAINING ADEQUATE SECURITY AND REFORMING INMATES SO THAT THEIR PROPENSITY TO COMMIT CRIMES IS REDUCED. FINDINGS REVEAL THAT IN THE SIZE RANGE OF 150 TO 450 INMATES, SIZE BY ITSELF IS UNRELATED TO SUCCESS AT ACHIEVING CORRECTIONAL GOALS. IN VIEW OF THE SUBSTANTIALLY HIGHER COST OF RUNNING SMALL INSTITUTIONS AND THE LACK OF CONCLUSIVE EVIDENCE THAT THE HIGHER COST ACHIEVES A MEASURABLY HIGHER DEGREE OF SUCCESS, INSTITUTIONS FOR MALE MAXIMUM AND MEDIUM SECURITY INMATES SHOULD BE CONSTRUCTED AT OR EXPANDED TO AN INMATE CAPACITY OF 400 TO 500. THIS RECOMMENDATION SHOULD BE IMPLEMENTED WITH REGARD FOR A HUMANE ENVIRONMENT WHICH WOULD AVOID 'WAREHOUSING' EFFECTS AND THE PROVISION OF ADEQUATE STAFF-INMATE RATIOS. A PROGRAM TO PROVIDE DATA TO SUPPORT PHYSICAL AND OPERATION DESIGN AND MODIFICATION OF INSTITUTIONS IS PROPOSED. THE APPENDIXES CONTAIN THE REPORT OF THE INTERNATIONAL STUDY OF THE RELATION BETWEEN PRISON SIZE AND PROGRAM SUCCESS AND SUPPORTING DATA FOR INSTITUTIONAL ECONOMIES OF SCALE. TABULAR DATA, FOOTNOTES, AND REFERENCES ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED--RCB)