Local Competition and PMSCs’ Behavior in Civil Wars

What is the significance of local or conflict-level competition on PMSCs’ military effectiveness? And what is the mechanism through which such competition improves PMSCs’ accountability? This chapter argues that variation in local competition, the number of PMSCs that operate in a given conflict zone, affects the level of accountability to the client. With the presence of multiple PMSCs, companies can anticipate the existence of informal peer monitoring. Whether gaining a competitive edge or safety concerns motivate companies’ monitoring of each other in the field, this puts pressure on PMSCs to fulfill contractual obligations and become more militarily effective or risk losing future contracts. The chapter argues that a greater level of local competition pushes companies to improve their skills and to limit fraud and human rights abuses, factors that contribute to quicker termination of war.

Private Military and Security Industry

This chapter describes existing international, domestic, and industry-wide approaches to improving PMSCs’ accountability in conflicts. It argues that monitoring PMSCs in the conflict zone remains a challenge for weak and strong states, though the problem is less severe for the latter, and limits PMSCs’ military effectiveness. The chapter argues that local and global competition among international PMSCs has the potential to improve military effectiveness by increasing accountability and shifting the balance of power in favor of the government, the most lucrative client of international PMSCs, with positive impact on reducing war duration. The focus is on improving military effectiveness in the area of skill and corporate professionalism, specifically PMSCs’ adherence to international humanitarian law and commitment to anti-fraud practices. The chapter shows why corporate professionalism matters for military effectiveness. It then highlights initial insights about the nature of international PMSCs’ presence in conflict zones from 1990 to 2008.

Global Competition, Corporate Structure, and PMSCs’ Accountability in Civil Wars

The rise of global competition marked by the expansion of the private military and security industry has pushed companies to gain a competitive edge. To secure capital and, occasionally, to signal commitment to accountability in response to competition, some companies have changed their corporate structure and become publicly traded corporations. Publicly traded companies have more stakeholders than private companies; this makes them accountable not only to the clients but also to the public and the media. As publicly traded PMSCs face greater reputational costs for engaging in criminal behavior, they are less likely to commit fraud and human rights abuses and be more military effective than private PMSCs. Data on fraud and human rights abuses in Iraq (2003–2019) show that publicly traded PMSCs exhibit higher levels of corporate professionalism. Greater professionalism by publicly traded PMSCs should help tilt the balance of power in favor of the government and contribute to shorter conflicts.

External Interventions and Civil Wars: Why Focus on Non-State Actors?

Existing research on the impact of external interventions into civil wars focuses mostly on states and international organizations. With the expansion of private military and security companies’ (PMSCs) presence in civil wars, there is a need to better understand the impact of such non-state actors on conflict dynamics. This chapter highlights the importance of understanding conditions under which PMSCs are more militarily effective in conflict zones, describes the existing focus in the study of PMSCs, and introduces a new theoretical focus that links variation in market competition to military effectiveness. It addresses previous data in the study of PMSCs and focuses on the benefits of new data, with specific focus on international PMSCs’ presence in major and minor civil wars.

Market Factors and PMSCs’ Effectiveness in Conflict Termination

This chapter presents the results of empirical analysis of local and global competition’s impact on PMSCs’ performance in civil wars from 1990 to 2008. Findings suggest that both market mechanisms contribute to conflict termination, but there is some limitation to the benefit. Mainly, local competition has a positive effect in major wars involving conventional tactics and some guerrilla warfare but is less significant in the most difficult conflict environments. Companies’ corporate structure, a factor linked to the global-competition dynamic, can affect military effectiveness in conflicts involving fewer casualties and more guerrilla warfare. The positive effect is also evident in hard-to-end conflicts but not the subset of the most complex environments, as publicly traded PMSCs may strategically avoid the most extreme conflict zones. Finally, results show that interventions by multiple PMSCs offer more benefits for conflict termination than interventions involving states or international organizations.

Under Pressure

This chapter highlights key findings and theoretical contribution of the book. It delineates policy recommendations based on the study of PMSCs’ interventions into civil wars and suggests that awarding contracts based on non-cost factors such as companies’ reputation for corporate professionalism and positive media coverage could increase the selection of those PMSCs that are most likely to be militarily effective. Awarding contracts to multiple companies as opposed to just one also improves accountability in a conflict zone. The chapter discusses ideas for future research such as comparing PMSCs’ performance across different local areas within a given conflict zone and exploring the rise of new mercenary groups and their impact on conflict dynamics.