Does anyone other than the state have the right to administer incarceration?

This seemingly abstract question is presenting itself in one statehouse after another as prisons, on average, are 10 percent over capacity and, in aggregate, have been gobbling up $1 billion a year in new construction.

Given the political unpopularity of prison expenditures and the public's apparent preference for the private sector, state officials nationwide are weighing the wisdom of hiring private firms, at reduced cost, to operate their prisons.

Some tentative answers are available in a light industrial park here, the site of the nation's first jail built, paid for and operated by a private company, Corrections Corporation of America. It has been open for a year.

The corporation receives $25.74 daily for each inmate from its client, the Immigration and Naturalization Service, to detain as many as 350 illegal aliens awaiting deportation hearings.

"They are absolutely fantastic," Paul O'Neill, the INS' Houston district director, said of the firm. "It's a pleasure to do business with people who know what they're doing."

O'Neill said that the corporation, using its own equity to cover the $4.3 million construction cost, built the minimum-security facility faster than the INS could have done, and that its daily fee is lower than what it costs the INS to jail detainees.

As a result of such success stories, for-profit prisons are the hottest thing in criminal justice. In the last two years, vendors have moved beyond their historic role in halfway houses and juvenile facilities and made proposals to build or operate full-scale jails and prisons. As many as half the states are considering such proposals.

Among critics of the system is Bruce Griffiths, counsel for the Houston chapter of the American Civil Liberties Union.

"You take a function of government that is unpopular and poorly funded to begin with," Griffiths said, "and then you throw in another potentially disruptive factor: the profit motive. The temptation to maximize profits by cutting costs is just going to be too great."

Michael Walzer, writing in a recent issue of The New Republic, argued in a more theoretical vein.

"It is crucial that the agents of punishment be agents of the laws and of people who make the laws," Walzer wrote. "Though it may sound paradoxical, the criminal is punished by his own agents -- who are ours, too. That's why private punishment is ruled out . . . . It exposes the prisoners to private or corporate purposes, and it sets them at some distance from the law."

Walzer also speculated that savings in the for-profit system will prove transitory. He said that vendors will turn out to be "sole source contractors" in a given state and eventually will run up costs and/or be exposed to the same types of lawsuits that have forced public prison systems to increase expenditures.

But the pressures created by the cost of running prison systems and their overcrowding have grown insistent. Since 1972, the state and federal prison population has more than doubled, to 440,000 inmates, and annual investment in prison construction has increased tenfold, to more than $1 billion.

For these reasons, privatization is being given a hard look throughout the country.

Last fall, Hamilton County, Tenn., which includes Chattanooga, became the nation's first county to hire a private vendor to run its jail.

A private company is seeking approval from the Pennsylvania General Assembly to build a$15 million prison outside Pittsburgh to house child molesters, informers and other offenders requiring protective custody. Eight eastern states have signed tentative agreements to send inmates to such a facility.

The Kentucky state legislature voted down requests in three consecutive sessions to build a new prison to relieve chronic overcrowding. So this year state corrections officials have invited vendors to submit bids on building a 200-bed minimum-security prison.

In Texas, overcrowding in the nation's second biggest prison system, which has 35,900 inmates, is so severe that one state prison unit must serve meals continuously from 2 a.m. to 11 p.m.

A consultant recently warned the Texas Legislature that it will have to spend $870 million in the next decade to bring the system into compliance with court-ordered standards.

For-profit vendors offer a very viable alternative," said Texas Gov. Mark White (D), whose state faces a revenue shortfall this year. "Massive new state-funded construction programs are out . . . . The magic of this is you don't have to put up $40 million to build a new prison. That's the big up side."

No one disputes that short-term savings through privatization are attractive -- as much as 20 percent, according to some estimates.

Critics say these savings stem from crimping on services, while private prison officals attribute them to private-sector efficiency.

"When you need something, you can look for your best price and buy it tomorrow. You don't have to spend a month filling out forms," said John Robinson, warden of the Corrections Corporation of America facility here, who worked for 11 years in Virginia's prison system.

The company demonstrated its speed by building the detention center in just six months. O'Neill said the INS would have needed at least two years if it had contracted for the job in standard fashion.

The center is designed to permit the corporation to use only seven guards on each work shift, a ratio of one guard for 50 inmates.

"That is a ludicrously poor ratio. It shows they are guided by profit, not by security," said Stefan Presser, Griffiths' predecessor at the Houston ACLU chapter.

Robinson acknowledged that such a staffing ratio would not work in a maximum-secruity setting but noted, "That's not what we have here."

Apart from one escape in the first week, which Robinson said resulted from a poorly designed chain-link fence door, there have been no escapes and no attacks on guards.

Guard stations are positioned to allow one post to watch over two 50-bed dormitory rooms. Indoor and outdoor recreation areas are patrolled by a single guard.

A control-booth operator doubles as a receptionist for the facility during the 16 hours each day when there is no receptionist, but the system still has problems.

When a reporter arrived early one morning for a scheduled interview, no receptionist was on duty. The control-booth operator, seeing the reporter through reinforced windows of two metal doors, opened the doors automatically, allowing the visitor into the jail's secure area without establishing his identity or whether he was armed.

And the guard emerged from the control booth to greet the reporter, leaving behind an unmanned room full of switches that could open every door in the facility.

Told of the incident, Robinson said, "There was a lapse in procedure."

All the facility's guards are bilingual, and virtually all the detainees are Mexican or Central American. Salaries for guards start at $14,400, slightly higher than their counterparts in the state prison system.

Costs are kept down by serving hot meals to inmates in their dormitories on trays, rather than by having everyone gather in a common dining area.

The building is clean and its bright orange walls give it a pleasant look. There is a library, but it does not yet have any books. Since the center is a short-term facility where the average stay is 12 days, it has no rehabilitation programs.

Inmates' rights groups oppose such facilities, saying in part that prisons are a "capacity driven" government function -- meaning that they fill up as quickly as they are built. These groups say they would prefer that overcrowding be solved by increasing paroles, probation and community-based programs.

Presser warned that private prisons will produce lawsuits alleging mistreatment or substandard conditions, and that states ultimately would be liable for such suits.

"The tragedy is that, to avoid having to spend necessary funds to solve problems, the states are going to wind up getting sued and spending more," he said.

Even some in the prison business agree about such potential suits.

"There are going to be some mistakes as this field starts to expand rapidly," said Ted Nissen, a former California prison administrator who owns Behavioral Systems of Pasadena, which grosses $6 million a year operating halfway houses and INS holding centers. "A lot of people are going to come in who don't know the first thing about prisons. But that's free enterprise."

"Deep down," Nissen said, "this country is just plain tired of bureaucrats."