Prison Enterprise Nature And Institutional Change

The jail is the legal penalty machinery of the country. The jail enterprise is a kind of special enterprise, it bechances along with the jail generation, and it is one of important component of the jail, it is different from the state-sponsored enterprise, it is founded, in order to provide enough reclaiming locations for criminals. The jail enterprise has the double attribute, that is, the reclaiming attribute and the economical attribute. Firm Theory can explain the reason how the heterogeneous proportion of the double attribute within the jail enterprise that is caused by the government financial investment defeat and leads the dissimilation of the jail function, the change of proportion of the double attribute between the reclaiming and the economy will cause the transaction cost to change, the nature of the jail enterprise will change when the proportion of economical attribute is more bigger than the proportion of reclaiming attribute, the jail enterprise will transform common stat-sponsored enterprise, instead of reducing the jail efficiency, on the other hand, when the proportion of reclaiming attribute is more bigger than the proportion of economical attribute, the asset specificity will be higher, it shows that the government financial investment can buy the opportunity cost of the economical attribute, while the economical attribute of the jail enterprise adheres the reclaiming attribute, which causes the lowest transaction cost of the jail enterprise in the condition of the criminals within the asset in terms of vertical integration, then the governing structure of the firm is optimal, it causes the lowest transaction cost and the highest efficiency, accordingly, jail enterprise should be delimited to the public enterprise.The institution will be changed, the definition of institutional vicissitude depends on the magnitude transaction cost, the institution causes the lowest transaction cost, and then it is the best one. When the heterogeneous institution causes profits, the jail enterprise will arise to institutional spontaneity -vicissitude, which would reduce higher efficiency of the penalty of the jail, when the police defeat impacts the maxim avail of the government, the government wishes that it would sublate the ingredient of the police defeat and lead the institutional mandatory vicissitude through the extraordinary law.