Granted, there is nothing efficient or particularly intelligent about the way government (at any level) does things. But privatizing prisons is not a good idea.
A couple better ideas are meting out proper punishments for crimes, and reintroducing the concept of prison being a very bad place to be. No TV. No gym equipment. Hard labor. Lousy food. It's nearly impossible to get yourself executed, but many crimes call for it. Rapes, hurting kids, murder, attempted murder all should result in a dead perpetrator, IMHO. Prison should be a deterrent, not a right of passage.
Of course, the problem with these ideas is trial lawyers and bleeding heart morons on the outside.