Outsourcing Military Force: A Transactions Cost Perspective on the Role of Military Companies

Eric Fredland

Defence and Peace Economics, 2004, vol. 15, issue 3, 205-219

Abstract: Since 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.

Keywords: Private military companies; Transactions cost economics; Economics of national security; JEL Codes: H11; H56; L24 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10242690310001623410 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:defpea:v:15:y:2004:i:3:p:205-219

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GDPE20

DOI: 10.1080/10242690310001623410

Access Statistics for this article

Defence and Peace Economics is currently edited by Professor Keith Hartley

More articles in Defence and Peace Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().