Choice, voice, and exit: Consumer power and the self-regulation of the private security industry

Abstract

Promoting Private Security Company (PSC) self-regulation has become a key focus due to high profile scandals during the military interventions in Iraq and Afghanistan. Related efforts include the Montreux Document, the International Code of Conduct for Private Security Service Providers (ICoC), American National Standards Institute/ASIS certification, and the new International Standards Organization (ISO) Management System Standard for Private Security Operations. Implicit in industry self-regulation, however, is the assumption that the consumers of private security services will help facilitate and enforce professional standards by shifting their custom to PSCs which have signed up to these codes of conduct or certification schemes. This article investigates the validity of this assumption with regard to government contracting. To what degree are public agencies able -and willing -to let professional standards guide their contracting behaviour? To answer this question, this article develops a general framework for the analysis of public consumer influence through choice, voice, and exit which draws on insights from microeconomics and Albert Hirschman's classical treatise Exit, Voice, Loyalty. Taking the United States government as an illustrative example, the analysis observes several obstacles to encouraging security industry self-regulation through consumer power.

The Corporate War Dead: New Perspectives on the Demographics of American and British Contractors

“…Over the past two decades or so, a network of private military and security companies (PMSCs) has grown from an obscure sector synonymous with mercenaryism (Dickinson, 2011; Percy, 2007) to a lawful executor of state violence (McCoy, 2012), at once a semiautonomous political power in its own right (Bures, 2014; Howe, 1998; Krahmann, 2016) and a critical complementing instrument of the traditional military operations of many states (Dunigan, 2011; Lovewine, 2011). 1 This rise has brought with it a considerable scholarly attention, with academics examining the role of these companies in international relations (Spearin, 2008; Spearin, 2011), the historical circumstances that led to this development (Kinsey, 2006; Singer, 2011), and, above all, the legal implications of outsourcing security and war (Gillard, 2006; Heinecken, 2013; Leander, 2010).…”

The anti-mercenary norm and the market for combat force

“…Her conclusion is rather skeptical, suggesting that there are "significant obstacles" to enforcing standards. 80 However, the two assessments do not need to be contradictory if the different groups of actors are taken into consideration. Among H-doers, the salience of the anti-mercenary norm is high, and the norm is effectively governed, while the opposite is true for L-doers.…”

Exit, Voice and Loyalty: Strategic Behavior in Standards Development Organizations

“…99 The diverse range of applications covers relationships between automobile manufacturers and suppliers in times of industry downturn; 100 modes of expression of dissent under an oppressive regime; 101 and industry self-regulation and inter-organizational relations in the domain of private security company (PSC). 102 Notably, the study by Dowding et al notes that the application of this framework argument has been "somewhat disappointing" in consideration of the "perceptiveness" of Hirschman's original, and insightful observations. However, O'Donnell's refinement in categorizing voice into "horizontal" and "vertical" voice is noteworthy.…”