The impact of judicially mandated reform of prison overcrowding shows up in the following ways: capital expenditures increase in the years after a court decision, corrections spending as a percentage of the total State budget increases after a court decision, and capital spending is reflected in an expansion of planned beds. On balance, the courts have forced States that have been defendants in prison condition cases to spend closer to the level of States that (as of 1979) had not experienced legal challenges to their corrections systems. The timing of litigation, overcrowding, and spending levels displays the following pattern: States with the most overcrowded conditions have had legal action brought against them, and States with low levels of spending have had lawsuits brought against their corrections systems. Final discussion focuses on three implications of judicial intervention in spending decisions: the courts may influence the strategic behavior of administrators, may be causing redistributive budgetary decisions, and may be reducing the importance of the budget as a vehicle for popular control. Tables, figures, and 29 references are supplied.