Potential Negative Externalities of Private Military Entrepreneurs from an Economic Perspective

Private military companies (PMC) can have considerable advantages for the customer on the one hand, but on the other hand can come with great dangers. Based on the theory of externalities, an attempt is made to illuminate this situation and to analyze the negative externalities associated with it. B...

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Bibliographic Details
Published in:Defence and peace economics 2024-02, Vol.35 (2), p.206-226
Main Author: Daumann, Frank
Format: Article
Language:English
Subjects:
Command and control
Control equipment
Entrepreneurs
Executive control
external effects
Externality
Hiring
Internalization
International law
Private military companies
Regulation
Transparency
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Summary:Private military companies (PMC) can have considerable advantages for the customer on the one hand, but on the other hand can come with great dangers. Based on the theory of externalities, an attempt is made to illuminate this situation and to analyze the negative externalities associated with it. By using an instrumental case study method we can identify two potential negative technological externalities of hiring PMCs which should be internalized. These two are the violation of national law and international humanitarian law in the theater of operation, and the lack of control of the executive by the legislative branch in the exporting state. Based on this, we present and discuss options to eliminate these negative technological externalities. It can be shown that the preferable set of measures includes instruments to create transparency, and command-and-control regulations on the individual state's level. While the second effect can easily be solved with domestic instruments, a supranational organization is needed to solve the first effect.
ISSN:1024-2694
1476-8267
DOI:10.1080/10242694.2022.2126213