Thursday, July 17, 2014

Principal-Agenct Theory Exemplified

The metaphor of principal and agent is one that I dodged during and after grad school, but caught up to me when I was working with a friend on the NATO and Afghanistan book.  Why?  Because we realized the question really was about delegation--and that is what P-A all about.

The basics are this: whenever someone (the principal) hires someone else (the agent) to do something, the agent ends up knowing more about the details of the matter than the principal, including how the agent is behaving as it is doing the work (or not doing the work).  So, principals need to figure out how to get the results they want--by hiring people with similar outlooks, by managing discretion, by oversight and by providing incentives.  See the Dave and Steve book for how it is applied to NATO and applied to the civil-military dynamics within the countries operating in Afghanistan.

P-A is relevant today because of the events in Ukraine.  We don't know much about what happened although some are foolish enough to speculate. But what we do know is this: Russia has organized, facilitated, equipped, and staffed the separatist movements in Ukraine.  They may not be entirely of Russia's creation and they are not entirely staffed by Russia, but it is clear that Russia's politicians have seen these separatists as their agents--their employees--to do their bidding. 

Russia wanted to destablize Ukraine, and viola, these folks turn out, armed and equipped.  So, the questions then, from a P-A perspective are:
  • What were the orders, the guidance, given to the separatists?  What was their job?  Were they given authority to shoot down planes?  Was that something permitted or at least not forbidden by Russia?
  • What were the separatists' rules of engagement?  
  • Were the folks back in Russia aware of the separatists' capabilities?  
  • What kinds of leverage does Russia have over the separtists?  Can they reward good behavior and punish bad behavior?  
  • Does Russia have agents on the ground operating within the separatists' organizations?  
The P-A problem is particularly problematic whenever a country relies on proxies rather than their own military.  If one is relying on one's own military, you can promote/demote/fire poorly behaving agents.  You can more easily control the assets they have, expanding or shrinking their authority and their capability.  But with proxies such as rebel groups?  Even ones which have members of your own military within them?  Not so easy.

Yet the lessons of the 2000s is that counter-terrorism and counter-insurgency is best done by locals.  Which means outsiders are stuck with the P-A problems of relying on proxies.  Hamid Karzai, for example. 

Why am I blathering about this today? Someone asked me about the implications of today's events in Ukraine for Syria. Given that Russia has a fair amount of leverage over the separatists and yet still get an awful outcome, one can only imagine how little control the US would have over the Syrian rebels that the US might arm.  So, yeah, don't expect any MANPADs (anti-aircraft weapons carried by individuals) to be sent to Syrian rebels anytime soon.