Outsourcing Military Force: A Transactions Cost Perspective on the Role of Military Companies
AbstractSince the mid-1990s, the operations of private, for profit, military companies have been the subject of increased political and media scrutiny. Firms in this industry provide both combat and support functions to sovereign governments. In this paper, the current and potential future role of these companies is examined from the perspective of transactions cost economics. The transactions cost approach suggests that inevitable contractual hazards sharply limit the combat/combat support role of these companies, despite substantial potential cost savings, even for poor countries with weak governments. However, there is a growing market, even in developed countries, for private provision of training and support.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Defence and Peace Economics.
Volume (Year): 15 (2004)
Issue (Month): 3 ()
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Find related papers by JEL classification:
- JEL - Labor and Demographic Economics - - - - -
- Cod - Mathematical and Quantitative Methods - - - - -
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
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