Case | HBS Case Collection | 2010 (Revised from original 2010 version)

The Market for Prisoners: Business, Crime and Punishment in the "American Dream"

Abstract

In 2010, Corrections Corporation of America (CCA), the largest private prison operator in the U.S., was considering expansion options. The company's largest customers, federal and state governments, were under economic pressure to reduce the incarceration rate and lower operating costs, potentially jeopardizing CCA's profits. Should CCA follow its competitor's footsteps and expand overseas? Or could it count on an ever-increasing population of U.S. prisoners to fuel continued growth?

Keywords: For-Profit Firms; Crime and Corruption; Profit; Law Enforcement; Growth and Development Strategy; Demand and Consumers; Business and Government Relations; Competitive Strategy; Expansion; United States;

Format: Print

29 pages

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Citation:

Di Tella, Rafael M., and Laura Winig. The Market for Prisoners: Business, Crime and Punishment in the "American Dream". Harvard Business School Case 710-042, December 2010. (Revised from original March 2010 version.)

This case describes the economic development problems faced by the small Caribbean-island country of Jamaica over most of the past half-century. The Jamaican economy showed relatively strong growth in the 1960s but stagnated in the 1970s. By the end of that decade, Jamaica was forced to turn to the International Monetary Fund (IMF) for balance-of-payments support. Over the 1980s and early 1990s, the unpopular policy conditions associated with IMF loan programs made the Fund a lightning rod for criticism over Jamaica's lack of economic progress. Jamaicans celebrated the end of IMF borrowing in the mid-1990s, but a severe financial crisis later that decade created a new layer of economic problems. In 2010, in the context of the global economic downturn, Jamaica once again returned to the IMF for financing support. This case allows students to explore the complicated economic difficulties faced by Jamaica, which remains burdened by a self-reinforcing set of interrelated factors, including high public debt, a sluggish private sector, an inefficient public sector, poverty, and crime, among others.

On July 21, 2005 China revalued its decade-long quasi-fixed exchange rate of approximately 8.28 yuan per U.S. dollar by 2.1 % to 8.11% and, at the same time, introduced a more market-based exchange rate system. Many analysts and economists were disappointed with what they considered too small a change and called for more flexibility in the U.S. dollar yuan exchange rate. Provides a timeline of further changes relevant to the Chinese renminbi.

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The Market for Prisoners: Business, Crime and Punishment in the "American Dream"

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