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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Defence and Peace Economics.
Volume (Year): 15 (2004)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandfonline.com/GDPE20
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996.
"The Proper Scope of Government: Theory and an Application to Prisons,"
NBER Working Papers
5744, National Bureau of Economic Research, Inc.
- Hart, Oliver & Shleifer, Andrei & Vishny, Robert W, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1127-61, November.
- Oliver Hart & Andrei Shleifer & Robert Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," Harvard Institute of Economic Research Working Papers 1778, Harvard - Institute of Economic Research.
- Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
- MacDonald, Peter, 2013. "Labour substitution and the scope for military outsourcing," MPRA Paper 46688, University Library of Munich, Germany.
- Bennedsen, Morten & Schultz, Christian, 2011. "Arm's length delegation of public services," Journal of Public Economics, Elsevier, vol. 95(7), pages 543-552.
- Morten Bennedsen & Christian Schultz, 2007.
"Arm’s Length Provision of Public Services,"
CIE Discussion Papers
2007-12, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.