QUOTE (Fix-it @ Oct 8 2009, 03:46 PM)

private corporations have been running prisons for quite some time now. using private security as public law enforcement has not yet, to my knowledge been done in the United States, for obvious reasons.
There's some question if it would even be allowed were it to be attempted.
Some functions are what's known in US law as "inherently governmental functions" that cannot be delegated or contracted to private entities - only performed by the government, at whatever level.
Defense is the biggie - you can use contractors in support roles, but not in the inherently governmental function of offensive combat. (I admit that this is honored more in the breach in the real world, but it's there.) You may contract random bits of governmental administration to private entities, but something like tax collection is almost certainly not something you could contract out. Prisons? Well, the common law has plenty of examples of prisoners being contracted out. It presents interesting constitutional issues as far as oversight of the prisons goes, but you can sort of do it.
Actual law enforcement, cops on the beat? Um, there's no way a court could reasonably claim precedent for that. Municipalities may contract to other municipalities for essential services like that, but the courts would be highly unlikely to allow private entities to take over such duties.
Plus, here's a disturbing thought.
One of the characteristics of a sovereign state, under customary international law, is that it has exclusive control over the principal means of internal or external violence within the state. IE, it controls the cops, it controls the army, those forces are pretty much top dog.
Which raises an interesting question: At what point does a state become non-sovereign because it isn't the exclusive "violence provider" in a territory?