The honest answer is that the setting matters far less than the person's readiness to change. Research consistently shows that treatment works when the individual is genuinely motivated, and struggles when they are not, regardless of whether it is court-mandated inside a facility or chosen voluntarily on the outside.
That said, there are real differences between the settings. Voluntary inpatient treatment outside of the criminal justice system allows the person to focus almost entirely on recovery without the additional stressors of incarceration. Intensive outpatient programs, or IOP, allow people to maintain some connection to family, work, and community while receiving structured treatment, which can be valuable for reinforcing recovery in real-world conditions.
Court-mandated programs inside correctional facilities have a built-in accountability structure that voluntary programs lack. There are consequences for non-compliance that do not exist on the outside. For some people, that structure is what makes treatment possible at all. It removes the ability to simply walk out, which is what happens when someone is not yet fully committed to change in a voluntary setting.
Sometimes incarceration itself is a necessary part of the process, not because prison produces healing, but because it interrupts the cycle long enough for a person to get clean, clear-headed, and receptive to what treatment is offering. A person who could never stay long enough in an outside program to make progress may complete a program inside.
None of it works if the person does not want it to. That is the variable that overrides everything else.