Previous Theoretical Approaches

Having presented and discussed the concerns and arguments of both the proponents and critics of using PMSCs, I introduce in the following section theoretical approaches to the study of PMSCs.

Even though there are various theoretical approaches to the study of the private military and security industry, a common overarching theoretical framework has been lacking to date. One of these theoretical approaches highlights the role of neo-liberal governmentality in catalyzing the rise of PMSCs as so-called “security experts”. Neo-liberal governmentality, coined by Foucault (see Bröckling, 2011; 2010), addresses the decentralization of government responsibilities and delegation of core functions to social agents. Against this background Abrahamsen and Williams (2010) and Leander and Munster (2007) argue that PMSCs benefit enormously from an increased practice of neo-liberal governmentality and that they have a share in the reinforcement of it.

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Another theoretical approach is the construction of risk by PMSCs. This approach is based on the concept of the risk society, coined by Beck (1992). The term describes a society which is predominantly concerned with the identification and mitigation of risks. According to Beck (1992), the creation of wealth in the course of industrialization, modernization, globalization, and technological development created a society in which the scarcity problem is solved. The abolishment of the scarcity problem, however, created itself new risks as side-effects which need to be taken care of; examples of such are climate change, nuclear disasters, or global terrorism. These new risks are hallmarked by their global, uncontrollable and incalculable consequences and the society’s preoccupation with the quantification and prevention of those. Because these risks are in essence incalculable, diffuse and lastly irremovable, they allow for social construction and the emergence of self-constituted “experts” who define the risks (Roorda, 2012). This in turn creates business opportunities and a market for those actors who make the construction and reduction of these risks their business. At this point, the literature on the construction of risk by PMSCs joins.

According to Leander (2005b), PMSCs not only implement contemporary security policy but also possess the power to shape it. This is due to their close contacts to key actors whose interests and preferences these companies bias. Krahmann (2011:371) even argues that PMSCs use the discourse of risk for their own ends and contribute “to the rise of a culture of fear in which the demand for security can never be satisfied and guarantees continuous profits.”

In her seminal study, Avant (2005) utilizes the theory of new institutionalism to analyze how the privatization of security changes a state’s control of force. New institutionalism is an umbrella term for different analytical approaches in the social sciences for the study of institutions and institutional mechanisms and their impact on individual behaviour, the society, economy, and politics (Peters, 2005). The most prominent ones are the historical, economic and sociological approaches, which evolved all independently from each other (Hall and Taylor, 1996). All approaches share a general understanding of “institutions” as a relatively stable formal or informal structural feature of society or polity which affects individual behaviour (Peters, 2005:18-19). They differ from each other in their origins, their exact conceptualization of institutions, their belief in how institutions evolve, change, operate, and in their answer on how individuals and institutions interact (Peters, 2005).

Historical institutionalism is primarily characterized by the idea of path dependency, namely the belief that social and political decisions are particularly affected by decisions and institutions made in the past (Steinmo et al., 1992).³⁴ The economic approach, the so-called new institutional economics (referred to as rational choice institutionalism in political science literature) treats individual behaviour as a rational and strategic interaction according to an exogenously given preference

34 The concept and basic idea of Historical institutionalism is highly simplified at this point. For a detailed description see Peters (2005) and Hall and Taylor (1996).

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function (Coase, 1937; Williamson, 1975; North, 1990; Coase, 1998). Institutions in this context influence individuals’ strategic behaviour by providing them with information about other individuals’ actions. By contrast, sociological institutionalism (grounded in the research area of organizational theory) is concerned with how institutions and cultural beliefs affect individuals’

behaviour (Powell and DiMaggio, 1991; Meyer and Scott, 1992). While acknowledging the rationality of individual behaviour, sociological institutionalism perceives the latter as influenced additionally by cultural beliefs (Hall and Taylor, 1996; Peters, 2005). Schneider and Aspinwall (2001:2) organize the three approaches along the following spectrum: “These are two ends of the same spectrum, which varies according to the extent to which institutions are internalised by agents and therefore the extent to which agents are capable of acting independently of them.” Avant (2005) centres her analysis on economic and sociological approaches. Combining economic and sociological arguments, she reasons that privatized security destabilizes the state’s collective monopoly over the control of force.

Another strand of the theoretical literature on PMSCs, which is closely related to the theory of new institutionalism, analyzes the relationship between states and PMSCs through the lenses of principal-agent theory. Principal-agent theory (PAT) itself is a theoretical approach associated with new institutional economics. It offers an analytical tool with which the mechanisms of state and PMSC relationship can be disclosed. Given the controversial academic debate on the promises and perils of private military and security services provision, an approach which helps to focus on the essentials – namely the delegation of a task to an agent and its associated consequences – seems highly appropriate. The basic ideas of PAT are that principal and agent have diverging interests and that there exist information and preference asymmetries. Previous literature on PMSCs has adapted PAT as an analytical tool to analyze the implications of using PMSCs. Cockayne (2007), for instance, applies PAT to the regulation of PMSCs and offers insights for potential risks and opportunities when contracting private actors for security services, especially against the background of legitimacy, authority and rule of law. He reasons that security, particularly with regard to weak states, risks becoming a product of power and cash rather than a legal right. Dickinson (2007) discusses possible accountability mechanisms and focuses on the question how to design and improve contracts in such a way that they ensure efficient monitoring, oversight and enforcement mechanisms. She particularly calls on non-governmental organizations to strive towards alternative accountability instruments such as international accreditation regimes and to mobilize political pressure. Stöber (2007) analyzes the delegation of security to private actors by conducting a case study of the Iraq War of 2003. He uses a principal-agent approach in order to examine potential contractual hazards and the possibilities of the principal to enforce the agent’s compliance to the negotiated contract. Stöber (2007:134) concludes that the principal must improve monitoring and control mechanisms, draw up

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more explicit contracts and build-up long-term relationships with PMSCs. Building on this strand of the literature, I also utilize the analytical framework of the principal-agent theory to examine the mechanisms of PMSC-state relations and the implications of outsourcing core military and security functions to private companies. To use Feaver’s (2003:113) words: “The monopoly on the legitimate use of force is what distinguishes governments from other institutions. Understanding how this monopoly is delegated and controlled is therefore central to the enterprise of political science.”