Privatization introduces the profit motive
In the case of prisons this will result in judges being persuaded to pass maximum sentences and lawmakers to pass laws ensuring maximum incarceration. The outcome will be higher instead of lower expense to administer the criminal justice system.
In the case of schools the bottom line will have priority, not student's welfare or quality of education.
In the case of defense contractors, the mercenaries' loyalty will be to the employer, not the country and the employer will actively lobby for perpetual war