Recent study shows why privatization in NATO missions backfires

Post Date: September 7, 2016 | Category: Around the World

Professional Overseas Contractors

This article examines the relation between NATO member states and the deployment of private military and security companies (PMSCs) in NATO missions. The phenomenon of PMSCs and the deployment of PMSCs has been extensively researched. The deployment of PMSCs by NATO member states in NATO missions has not been researched as much.

The article provides three hypothesis to test whether the deployment of PMSCs by NATO member states should be increased. The ISAF NATO mission is analysed using an regulatory case study, in order to provide an answer to the question why NATO member states deploy PMSCs in NATO missions. Over the course of the ISAF mission, the quality and quantity of deployed PMSCs varied, making it debatable whether the deployment of PMSCs in NATO mission was beneficial. Research points out that NATO member states deploy PMSCs due to their financial, political, and military advantages. The deployment of PMSCs reduces the financial and the political costs of participation, but does not provide military advantages that outweigh the disadvantages.

In modern warfare not only states fight for influence in international affairs. More actors are pulled into military operations by states and military alliances to act on their behalf at the battlefield. Private military and security companies (PMSCs) are such actors which can be found in conflict areas around the world. Since the early 1960s and their presence is rapidly expanding. Member states of the Northern Atlantic Treaty Organisation (NATO), a military alliance for Northern American and European states, use PMSCs in military operations as well leading to good, bad, and sometimes ugly results. In this introduction the rise of PMSCs is outlined, followed by the presentation of the research puzzle, and the associated research questions.

Private Military & Security

Since the 19th century the deployment of military forces motivated by personal gain, referred to as mercenaries, is considered illegitimate (Minow, 2005). With the emergence of the nation state, states and their military forces were assigned special status in relation to security at both the national as the international level. The special status of states in relation to war and security was formalised by various conventions, treaties, and charters such as the Montevideo Convention (1933) (Stenner, 2014) Kellog-Briand Pact (1928), the UN charter (1945), and the Geneva Conventions (Krahmann, 2013). At the end of the 20th century recruitment and deployment of military forces motivated by personal gains turned into the deployment of private military and security companies (PMSCs) with commercial motives. The use of PMSCs in conflict areas has expanded over the past 20 years both in numbers of company employees and in frequency of deployment (Leander, 2005). In this thesis a PMSC is defined as a non-governmental actor who offers military services such as consultancy, intelligence, logistics, or/and support to military operations. The act of deploying PMSCs in NATO missions is defined as the contracting of PMSCs by a NATO member state for the purpose of supporting that member state’s national army. Throughout the thesis, ‘national forces’ refers to the military forces of the respective NATO member state.

Research puzzle

The phenomenon of the rise and use of PMSCs by states has been topic of multiple studies. The deployment of PMSCs in NATO missions is hardly researched. NATO missions are military crisis-management operations under NATO command. The legitimate use of force is defined as proportional force used by the state. There is little known about why organisations such as NATO allow the deployment of PMSCs by NATO member states, given the clash with the state’s monopoly on violence and the great influence PMSCs have on the outcomes of military operations (Hammes, 2011). This thesis focusses on the question why NATO member states deploy PMSCs in NATO missions, and what the associated consequences are for the NATO mission.

The following answers five main questions:

  1. What tasks do the deployed PMSCs have in NATO missions?
  2. What military and security tasks do PMSCs take over from national armies?
  3. What are the financial consequences of the PMSC deployment in NATO missions?
  4. What are the political consequences of the PMSC deployment in NATO missions?
  5. What are the military consequences of the PMSC deployment in NATO missions?

The Rise of Private Military Security Companies


Scholars such as Halpin (2011) and Singer (2005), explain the rise of PMSCs through the decline of the role of the nation state and the end of the Cold. The disintegration of the Soviet Union in 1991, took away a major source of military tensions across the world, leading to decreases in defence budgets and downsizing of military forces (Stenner, 2014). Together with advanced electronic military equipment replacing man power, the decline in demand for national forces can be explained through the collapse of the Soviet Union (Baum & McGahan, 2013; Halpin, 2011). Often experienced and well-trained, these redundant former soldiers turned to PMSCs, who were able to select from a worldwide pool of job seekers those with the best expertise. PMSCs thus became able to quickly mobilise high-level military forces to take over military and security tasks of national forces (Hammes, 2011). The privatisation of government tasks throughout the 1980s (Sullivan, 2010), led to the privatisation in the national military as well


The rise of PMSCs can be explained from an ideological perspective. Liberalisation and privatisation where meant to bring efficiency to government institutions. The wave of privatisation stemming from USA president Ronald Reagan in the 1980s led to the outsourcing of government tasks such as postal services, railways, as well as the contracting of private companies. This ideology of liberalisation also lead to the outsourcing of military and security government tasks (Sullivan, 2010; Fahn & Hadjer, 2015). Influential states such as the United States of America (USA) play an important role in the emergence, deployment and legalisation of PMSCs in security situations around the world. In this thesis a norm is defined in the words of Gregory Raymond, that norms are ‘generalised standards of conduct that delineate the scope of a state’s entitlements, the extent of this obligations, and the range of its jurisdiction’ .


The rise of PMSCs in contemporary politics also relates to economic principles such as market demand and supply. States deploys PMSCs because they are considered to be less expensive than national troops. The market for private military services, expanded over the years due to increased demand from various actors such as governments, NGO’s, and international organisations, and correlating increased supply of services provided by PMSCs. This lead to increased availability and competition among PMSCs, lowering prices overall, making PMSC deployment even more advantageous for states.


PMSCs and mercenaries share characteristics. There is no fully agreed upon definition of ‘mercenary’ (Bures, 2005; Petersohn, 2014) nor ‘PMSC’ (Bures, 2005; Minow, 2005). Various scholars have nevertheless differentiated both concepts based on their tasks in combat situations (Petersohn, 2014). A mercenary is often defined as a fighter ‘participating in combat for pay’ (Petersohn, 2014, p.476), and has three characteristics (Bures, 2005):

- mercenaries are external to the military conflict

- the motivation for participating in the conflict are private gains

- mercenaries participate in combat situations.

The Geneva Conventions prohibit the deployment and use of mercenaries under the rule of Additional Protocol 1 (1977) (Krahmann, 2013). A precise definition of a PMSC is difficult due to differences in corporate structure, goals, and services (Stenner, 2014). Just like mercenaries, PMSCs are often foreign to the conflict, and are motivated by private gains. Under current norms and regulations private military contractors are not allowed to engage in combat situations, except in self-defence cases such as ambushes (Leander, 2005).


In the article of Fahn & Hadjer (2015) is stated that financial, political, and military factors are the three parameters determining whether states will deploy PMSCs. Financial, political, and military factors help to break down the motivations of states for deploying PMSCs. These three parameters, are used to generate hypothesis related to the motivations of member states to deploy PMSCs in NATO missions.

Financial factors

The financial advantages of PMSC deployment for military purposes in the short and long run are widely proclaimed by scholars and government institutions (Fahn & Hadjer, 2015; Pattison, 2008; Halpin, 2011). The quality of PMSCs can be equal to that of national armies, and PMSCs are able to perform the tasks of national armies for less in the short run (Fahn & Hadjer, 2015; Sullivan, 2010). Contrary to national forces, PMSCs are subject to the competition and bidding of other PMSCs. In order to be awarded a contract by a state (or another actor), PMSCs have to offer the lowest price possible. National forces are not subject to this competition against other military actors, and thus have less incentive to reduce the costs of their deployment. This basic functioning of the market for force leads to lower prices (Leander, 2005). In the long run PMSCs are financially beneficial as well. National armies are expensive. The average training costs of a UK infantry soldier are £ 34.000 (UK army secretariat, personal communication, January 21, 2015). For a USA infantry soldier that is about US$ 44,000 (Olick, 2002). This in combination with pensions and social security benefits makes national forces relatively expensive in the long run (Fallows, 2015; Giraldi, 2015). PMSCs provide a cheaper alternative: the costs of PMSC deployment are short term and the contractors do not have to receive training or benefits at the expense of the tax payer in the long run (Halpin, 2011). In times when national forces are not as much needed, it is hard to decrease the amount of national forces due to their contracts ensuring benefits and potential future needs (Sullivan, 2010). While the defence spending of NATO member states is steadily decreasing (Statista, 2016a), NATO member states have great military ambitions on the international stage (AIV, 2007; Mattelear, 2016). Thus member states have to find ways to perform the same tasks for less money (The American Interest, 2016).

Political factors

Fahn & Hadjer (2015) and Hammes (2011) state that PMSCs decrease the political costs of executing military actions and operations. Sometimes states pursue policies that are unpopular, leading to political opposition towards these policies. The greater the political opposition, the greater the political costs of executing this policy. The deployment of PMSCs can reduce the political costs of participation in NATO missions by reducing the amount of deployed national forces (Singer, 2005), replacing national forces in dangerous situations (AIV, 2007), and by performing tasks national forces are not mandated to execute, thus limiting public debate about the mandate of national forces (Fahn & Hadjer, 2015).

NATO member states are vulnerable to domestic political pressure to related to participation in NATO missions (Silverstone, 2002). Domestic opposition towards NATO missions increases (Saikal, 2006; Kitchen, 2010), NATO member states have to find ways to participate in NATO missions the same tasks with less political costs. By deploying PMSCs, less national army personnel is involved (Fahn & Hadjer, 2015) and shortages of national forces are filled (Singer,2005).

Military factors

Another justification of PMSC deployment by states is their military professionalism (Halpin, 2011). The professionalism of PMSCs becomes clear due to the quality of PMSCs, and the practical advantages PMSCs have over national forces. PMSCs have qualitative advantages over national armies because they tend to recruit already highly trained and experienced forces regardless of their nationality due to the higher salaries (Hammes, 2011). PMSCs can be qualitatively as good or even better than national forces (Leander, 2005). Adding to that is the fact that PMSCs have various military advantages over national forces such as rapid deployment capabilities (Hammes, 2011; Sullivan, 2010), familiarity with local population and customs (AIV, 2007), and providing and maintaining military equipment (Singer, 2005). In general PMSCs are increasingly capable of taking over military tasks of national forces.


A qualitative analysis of existing literature is conducted and the single case study method is used to research potential changes in the amount of deployed PMSCs in the ISAF NATO mission. The time and space bound nature of a case study allows the comparison of the deployment of PMSCs throughout the period, making it possible to compare the motivations for PMSC deployment within a NATO mission. This comparison within the case helps to better test the constructed hypotheses. This research is explanatory in nature as it explains how motivations for PMSC deployment in NATO missions (independent variable), change the number of deployed PMSCs (dependent variable) during the ISAF mission. Results from the analysis of the case study are gathered and structured in order to either reject or accept the hypotheses.

Case selection

Since the end of the Cold War, NATOs military operations and missions have expanded to non-NATO territories (Kitchen, 2010), such as Afghanistan. The globalisation of security threats to NATO member states and the financial constraints for defence expenditures of NATO member states challenge the NATO alliance to find ways to conduct military missions with less resources (Wittmann, 2010). The ISAF mission is one of the recent NATO missions in which new tactics to coop with these challenges have been implemented, such as the deployment of PMSCs.

The ISAF is a revelatory case because it is one of the NATO missions taking place during the rise of PMSCs, thus being one of the few cases in which the phenomenon of PMSC deployment in NATO missions can be found. The selected NATO mission is the International Security Assistance Force (ISAF) (2001 - 2014) (NATO, 2015a). The majority of NATO member states participated in the ISAF mission and due to the fact that the mission has ended recently, the contemporary status of PMSC deployment in NATO missions can be analysed.

A qualitative content analysis of written sources is the best methodology to analyse the phenomenon of PMSC deployment by NATO member states. This qualitative analysis provides the opportunity to merge the findings of multiple scholars into objective answers to the research questions.

The used literature can be researched by other scholars, increasing the dependability of this research.

The credibility of this research is based on primary sources such as rapports of governmental organisations, news articles, and datasets related to the deployment of PMSCs in the ISAF mission, and secondary sources such as peer-reviewed articles of scholars.

The transferability of the findings towards other NATO missions is good, given that the presented hypotheses will help to develop a method or model structuring the motivations for PMSC deployment by NATO member states.

What about ISAF

The International Security Assistance Force (ISAF) was a military mission from 2001 – 2014 issued by United Nations Security Council resolution 1386, which came under full NATO command in 2003. The main objective of the ISAF mission was to support the Afghan government, by setting up an effective internal security system, to prevent insurgents from uprising, and to eliminate international terrorist threats. During the ISAF mission 51 nation states participated, leading to a 130,000 strong force at its peak. The ISAF mission steadily expanded its reach from the surroundings of Kabul in 2001 to Afghanistan as a whole in 2006. ISAF forces were met with fierce resistance from insurgents especially in the East and South of Afghanistan (NATO, 2015a). In the ISAF case study PMSCs were used by NATO member states (Hammes, 2011)

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