Private military and security companies, contract structure, market competition, and violence in Iraq

Abstract

Conflict environments exacerbate an incentive dilemma between employers and private military and security companies (PMSCs). PMSCs seek to maximize profits, but employers seek to minimize expenses and maximize services. We argue that PMSCs are influenced by two complementary economic factors: contract structure and intra-sector competition. Contract structures are set by employers and establish compensation constraints and intra-sector competition identifies potential replacements. Both impact service delivery. We find that PMSCs with contract structures that lack performance incentives, even in the presence of competition, increase the likelihood of violence in Iraq. PMSCs that lacked intra-sector competition had a similar but smaller effect.

Managerial capacity in conflict environments: Management effects of private military and security companies in Iraq

“…Managers that can adapt to limited competition constraints are more likely to effectively select and manage PMSCs. Yet, PMSC competition is frequently suboptimal, even excluding instances where the government uses no‐competition contract awards (Tkach ). In sub‐optimal competitive environments, experienced managers frequently utilize new strategies that require additional resource investments to overcome challenges (Girth et al ).…”

“…Services are essential for the US military because they free the military to focus on core combat requirements. However, PMSCs may detract from military effectiveness when they are not integrated into the command structure (Dunigan ), shirk service responsibilities (Tkach ) or commit acts that undermine government legitimacy, including rules of engagement violations (Fitzsimmons ). Thus, while PMSCs are secondary actors in Iraq when compared to US military operations and insurgent activity, PMSC service delivery affects the US military operations and level of violence.…”

Toward a trans-scalar peace system: challenging complex global conflict systems

“…But within the contexts of fragility, inequality, and endemic violence characteristic of post-conflict societies these benefits are rarely realized and unpredictable negative effects are far more common, as has been evidenced in cases such as Iraq, 68 Nigeria, 69 Brazil, 70 Colombia, 71 and Sierra Leone. 72 Such cases show how what we have today is not a global marketplace where equally empowered actors meet to exchange goods and services freely under the equal protection of representative institutions, but a global system of multiple and extreme inequalities giving structure to a complex assemblage of interactions characterized by domination and manipulation.…”

The Private Security Events Database

“…Finally, Tkach (2017) compiled data on PMSCs in Iraq from February 2004 to December 2008. His study uses the US Census Bureau records on Department of Defense contracts to record PMSC operations (at the governorate level for each month-year) and other sources to measure both contract competition and structure.…”

“…First, we take a broader scope. Rather than focusing on a single continent (Akcinaroglu and Radziszewski 2013), just weak states (PSD), or a particular conflict (Tkach 2017), our data cover three regions over a longer period of time . We also gather detail on a wider range of commercial security providers relative to extant databases by incorporating information on contractors from unnamed companies in addition to those associated with known contracts.…”