What if banning private prisons made things worse?

I haven't always been comfortable with the idea of private prisons because of the problem with incentives and cronyism related to government contracts but as Reason.com notes:

There’s a key difference, however, between privately run prisons and government-run counterparts: the contract mechanism, which provides a vehicle for accountability. If dissatisfied with performance, a government can cancel a prison contract with a private company. By contrast, the government tends not to fire itself, and the watchmen ultimately watch themselves.

Of course, this depends on contracts that allow for cancellation. What's more interesting is how some states are being proactive about reshaping incentives:

In 2013, Pennsylvania cancelled all of its contracts with private operators of community corrections centers and rebid them on a performance basis, tying vendor compensation to their performance at reducing recidivism rates among the populations they manage. The state corrections agency recently announced an overall 11.3% reduction in recidivism across its 42 contracted community corrections centers between July 2014 and June 2015, marking the second consecutive year of decline.

That same year, Pennsylvania awarded a five-year correctional mental health services contract that was updated to significantly enhance performance expectations, including financial incentives to reduce the number of misconducts for mentally ill offenders, the number of inmates recommitted to prison mental health units, and the number of recommitments to prison residential treatment units. Conversely, the state can impose financial penalties on the contractor if it fails to achieve targeted baseline results for those same metrics.