The Justice Department announced on Thursday that it would begin to phase out the use of private prisons, citing safety concerns as well as their lack of rehabilitative services. We asked Natasha Frost, mass incarceration expert and associate professor in the School of Criminology and Criminal Justice, to explain how this directive might affect for-profit prisons at the state level and whether the DOJ could change its policy depending on how this fall’s presidential election shakes out.

The Justice Department’s directive is limited to the Federal Bureau of Prisons’ 13 privately run facilities, which currently house approximately 22,000 inmates, including many noncitizens who could be deported at the end of their sentences. How might the DOJ plan to end its use of private prisons be used to spark broader change in the prison system, particularly in regard to state-level facilities, which house more than 90,000 prisoners, and the Department of Homeland Security’s Immigration and Customs Enforcement, which has a multimillion-dollar relationship with the private corrections industry?

For now the directive was addressed to the Bureau of Prisons, but other Justice Department and Homeland Security agencies utilize private prison beds. Although those agencies may not be initially subject to the directive, it is difficult to imagine a scenario under which this decision does not more broadly affect the relationship between the federal government and the private prison industry. It would, after all, be difficult to justify the continued use of private prisons following Deputy Attorney General Yates’ very public pronouncement that these prisons “compare poorly to our own bureau facilities…do not save substantially on costs…and do not maintain the same level of safety and security.”

The symbolic impact of this memo is probably as important as its direct impact, as it is likely to reverberate across the states as well. Investment in private prison beds has fluctuated across the states and the feds are certainly not the first to announce that they are ending contracts, but this announcement was made in the context of a lot of other federal and state activity around prison and sentencing reform. Correctional practices that have been more or less taken for granted for decades, like the use of solitary confinement and highly restrictive housing units, are increasingly being called into question. Federal policy has certainly been known to influence state policy across all sorts of arenas—particularly when federal assistance is tied to the adoption of specific policies or practices—and criminal justice reform is certainly no exception.

This directive also has to be considered in the national context where more general prison reform efforts have been gaining momentum. In our book, The Punishment Imperative, criminologist Todd Clear and I wrote about the potential for an end to the era of mass incarceration. We looked at what was happening to prison populations around the country (they were decreasing), critically assessed the historical drivers of prison populations (of which there are many), and argued that something had shifted in a way that suggested there was a window of opportunity for real change. We predicted that we might be seeing the beginning of the end of mass incarceration. At the time, many called our prediction premature but it has since borne out in many ways and momentum for prison reform efforts continues to grow. Since 2010 or so, we have seen concerted efforts across many of the states to reduce reliance on incarceration and decrease prison populations. States have been closing prisons. Justice reinvestment initiatives, usually supported by substantial federal funding, have been launched across many states, including quite recently here in Massachusetts. And as importantly, virtually every stakeholder group has publicly pronounced a need to reduce our nation’s reliance on incarceration. This most recent decision to phase out the Federal Bureau of Prisons’ private prison use has to be considered in that broader context.

In 2014, the Justice Department’s Bureau of Prisons spent more than $630 million on contracts with the private prison industry’s three biggest players: Corrections Corporation of America, the GEO Group, and Management and Training Corporation. In what ways might the DOJ plan affect the future of these three companies, especially as it relates to their bottom line and the kind of services they provide to prisoners?

The Justice Department’s memo to the Federal Bureau of Prisons represents a significant shift in federal policy and the impacts of that decision were felt immediately by the corporations established to profit off of imprisonment. With the announcement, stocks in these companies plummeted. Some of the initial media attention to this memo suggested that these corporations would fight back and defend their record, criticizing the Office of the Inspector General report on which this decision heavily relied, and they undoubtedly will try to do so; but, it seems this might be a case of closing the barn door after the horse has already left the barn. Of course, these companies will try to regroup, but it is not clear that they would make efforts to substantially improve the nature and quality of the services they provide in their correctional facilities.

Ultimately the fate of the private prison industry will depend largely on what the states do in response to this federal directive and, more importantly, on whether recent efforts to reduce reliance on incarceration can sustain momentum. If the private prison industry were to collapse, it seems likely that these corporations would move into other justice areas where corporate involvement is less scrutinized.

Hillary Clinton and Donald Trump seem to have opposing views on the private prison system. Trump has said, “I do think we can do a lot of privatizations and private prisons. It seems to work a lot better.” Clinton, meanwhile, has said she would no longer accept donations from the industry and has declared, “We should end private prisons and private detention centers.” What are the chances that the Department of Justice changes its policy on private prisons under a new administration?

All of these decisions are made in a political context, and it should perhaps not be surprising that this most recent directive was issued in the immediate run-up to the national election. As is always the case, the ultimate fate of this relationship between the federal government and these corporations could depend quite heavily on who ends up winning this election, but this directive delivers a fairly significant blow at an opportune moment. Since their inception, there have been efforts to try to get Americans to divest from companies that profit on incarceration, but in the context other very public critiques of the private prison industry, including the recent Mother Jones exposé of what it was like working in one of these prisons, it does seem as though it will be difficult for the private prison industry to fully recover.