To remain competitive, governments worldwide have made difficult decisions to reduce debt and minimize taxes. As a result, the role of the public sector has changed significantly. In Victoria, the public sector has been at the cutting edge of reform for the last 6 years. The Government has pursued a program designed to increase the productivity of the public sector. A major aspect of the reform programs has been to privatize significant aspects of government services, including a range of services within the justice sector. The privatization of approximately 45 percent of the State's adult inmate capacity has been the focus of many debates. The advent of three new private prison operators since 1996 has required the development of more rigorous and transparent design and operational standards for prisons; introduced new and additional accountability mechanisms; and provided an imperative for the public prison system to become more efficient, responsive, and innovative. Although the transition to a new multi-provider system has not been without its problems, overall results to date would indicate that the prison privatization "social experiment" in Victoria is bringing substantial benefits in terms of service quality, innovation, responsiveness, and reduced costs. 9 references