The Privatization of Military and Security Services and the Limits of Contract: Lessons from the US
EUI Working Papers MWP 2010/31 - Max Weber Programme
33 Pages Posted: 25 Jul 2011
Date Written: July 17, 2011
A consistent body of literature has focused in recent years on the potentialities for market mechanisms to improve the enforcement of international human rights law against the breaches committed by private military and security companies (“PMSCs”) employed by sovereign entities. Yet, of all the avenues known by the law of contract to increase the degree of compliance with international law, none is ever included in the contracts between PMSCs and their major sovereign customers.
This paper gives an account of this reluctancy on the part of the States, based on a survey of the contracts concluded by the U.S. administration during the first stage of the Iraq occupation and the comparative analysis of public and private organizations. In contrast to domestic outsourcing, the provision of military force takes place in conditions of high bilateral dependency, social embeddedness, specific contractual hazards, that taken together deter from traditional methods of contract enforcement (litigation and arbitration) and emphasize mechanisms based on reputational mechanisms and hierarchy.
These limitations should be attentively considered in shaping the role of contract standardization into a comprehensive regulatory strategy at national and international levels.
Keywords: private military and security companies, regulation, contract law, human rights, transactions costs
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