Should small communities with fragile or declining economies build a prison to improve their economy? In a recent study, Big Prisons, Small Towns: Prison Economics in Rural America, brought to you by the Sentencing Project, this question is addressed with an unusual attention to detail. The study goes beyond prior research by looking at the economic effect of 38 new prisons in rural areas of New York over a 25 year period. The finding: prisons have had no effect on per capita income or unemployment levels of local communities.
A list of other studies on this topic is available at http://www.sonoma.edu/ccjs/info/prisoncrime.html (available in September 2007), although these references are dated. The recent study by Hooks et al., "The Prison Industry: Carceral Expansion and Employment in U.S. Counties, 1969-1994", Social Science Quarterly2004, Vol. 85 (1), 37-57, comes to similar pessimistic conclusions.