This testimony from Jack McHugh of the Mackinac Center for Public Policy is a few years old, but it is worth reading.

McHugh’s testimony is about private prisons, and the cost savings they can create throughout Michigan.  He makes this particularly bold suggestion: “While there is ample evidence that individual private prisons have lower costs in ‘apples-to-apples’ comparisons, their very existence in a state lowers costs throughout the entire system, as public and private facilities ‘sharpen their pencils’ under the pressure of competition.”

McHugh is arguing, in essence, that privatizing some prisons (or at least some prison functions) could spark a wave of competitiveness throughout all Michigan state agencies.  That is a possibility worth exploring.