Private military and security companies, corporate structure, and levels of violence in Iraq

This article analyzes the effect of private military and security companies (PMSCs) on levels of civilian casualties in Iraqi governorates from 2004 to 2007. Within a principal-agent framework, we argue that the capacity to monitor and evaluate PMSC performance is conditioned by the availability of performance-related information. Crucially, PMSC corporate structure impacts the information available to the employer. Differences in PMSCs’ corporate structure (e.g., whether a firm is publicly traded or closed ownership) influences the disclosure of different levels of information about a firm’s performance. A closed ownership PMSC is opaque, obstructing access to information. Publicly traded PMSCs, by contrast, have legal obligations to release information on corporate performance, policies, and contracts. Closed ownership PMSCs are correlated with increases in the likelihood of civilian casualties while publicly traded PMSCs have no effect on civilian casualties.