Published in the FinTimes, November 15, 2003:
Although the sacking of four of Colombia's top generals for improprieties and the departure of the chief of the armed forces deserve approval, these events, coupled with President Alvaro Uribe's limited cabinet reshuffle, will do little to purge the country's corruption-laden government and military ("Chief of Colombia's armed forces steps down", November 12). Indeed, when one considers the incentive structure these institutions face, personnel changes are cosmetic remedies at best.
The fallacy that countries in general and Colombia in particular subscribe to is the notion of "national security". Far from being a homogenous good, security is a heterogeneous and divisible product by nature and can be ably provided by private security firms.
Whereas the military and the government that oversees it exist by virtue of compulsory taxation and are only indirectly accountable at the ballot box, competing private security firms are governed by profits and losses, an unambiguous gauge of consumer satisfaction.
Although the bravery and dedication of its personnel is unquestioned, as an institution beyond the disciplines of competition or prices, the military, like government, faces perverse incentives. The disutility of labour and scant accountability provides breeding grounds for excess and corruption, both of which are rife in Colombia's armed forces.
Moreover, the existence of a tax-funded protection agency, rather than making the recipients of its services safer, is liable to imperil the lives of citizens. Aggressors, like Colombia's guerilla and paramilitary organisations, are more apt to target civilians, who as taxpayers underwrite military activities.
As radical as the infusion of competition into security provision may sound, it is worth mentioning that the United Nations (UN) is mulling the idea of employing soldiers provided by a private, albeit non-profit, firm for peacekeeping and conflict prevention missions. The UN has at least recognised the inherent deficiencies of state-dispatched forces.
In economics it is commonly held that monopolies are inimical to consumer and societal welfare. Why then, should this observation not apply to security?
