During the 1980's the majority of states were mandated by court order to reduce the overcrowded conditions of their prisons. The response of some was to release prisoners in an ad hoc fashion and to use probation as an alternative to prison. The central issue of this dissertation was the efficient allocation of resources within the criminal justice system. Specifically, four questions were addressed. What factors determined the sanction? What criminal and socio-economic characteristics distinguished successful ex-inmates? What criminal and socio-economic characteristics distinguished successful probationers. Were criminal types that were more successful under one sanction being punished via the other sanction? A sample of 740 convicted felons from Harris County (Houston), Texas were tracked from January and February, 1980 through June 1986. Some were placed on probation while the others were sent to prison and later released. Logit analysis was used to estimate the effect of criminal and socio-economic covariates on the probability of prison relative to the probability of probation. Empirical results suggested that black offenders who were convicted of personal injury crimes or theft offenses were more likely to be sent to prison than placed on probation. Offenders were more likely to be placed on probation if they had a job and had been released on bond. Duration analysis was used to estimate hazard rates. These were used to link criminal justice and socio-economic factors to the timing and probability of recidivating. The relative chance of failure decreased for ex-inmates who had been incarcerated less than the average prison term and then were released to a halfway house or to family members. Black first time offenders who sought counseling for substance abuse problems were the most likely successful probationers. Police presence was a deterrent and increased police productivity improved the chances of detection. The relative deprivation hypothesis was supported. Policy recommendations included extending the length of probation, reducing the length of prison terms, and requiring closer supervision for all upon re-entry into society.