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Do Private Military Contractors cost more or less than Militaries?

One of the principal debates on the topic of the privatization of security is on the question of efficacy. Does privatizing security cost us less money? Expert opinions on the topic are divided. A simple comparison between contractors and soldiers shows that a contractor’s salary is typically higher. This is one of the main reasons why many prefer a private military subcontractor (PMSC) career over the extension of their military contract. Yet, the cost of privatization does not end in salaries alone. By privatizing, the state saves money on training, which is done either by the companies or initially by the military itself. The state also saves money on benefits. In an interview to Frontline in 2005, Doug Brooks, the President of International Peace Operations Association stated that:

“In terms of salary to salary, if you take a look at, say, a corporal in Iraq, [he]'s probably getting $18,000 a year, which isn't much. But for the U.S., it's costing about $25,000 a month to keep that corporal in Iraq just because of all of the military services and support and so on that goes for that individual. A close protection person or a personal security person -- and you're talking about a former Special Forces person with 30 years' experience in the military, and then experience doing personal security -- they may get upwards of $750 a day to do that job.”

So PMSCs do save money for tax payers after all, don’t then? Not so fast…A broader outlook uncovers some disturbing implications of the privatization of security. A master’s thesis by Allison Halpin at the University of Kansas entitled “US Government Outsourcing, the Private Military Industry, and Operation Iraqi Freedom: A Case Study in Conflict Contracting” addresses some of the unintended consequences and broader implications of outsourcing security. Halpin highlight problematic practices of PMSCs such as waste, fraud, and corruption, all significantly increasing the costs of the wars. Halpin summarizes her work by saying that though in theory outsourcing of military services can work, in the cases she examined that was not the reality. With dubious contracts, lack of competition, poor regulation, and a strong PMSC lobby, the US outsourcing of security is not as effective as one would be led to believe.

Nonetheless the question still stands: Can PMSC decrease the costs of armed conflict? The answer is that it is not clear since no systematic and comprehensive studies have been conducted on the topic. In order for us to know that there is a need for a comprehensive study that will include direct and indirect costs, intended and unintended consequences, and counterfactual scenarios.

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