Privatizing Military Businesses: The Origins of Military’s Economic Exit and Persistence under Democracies
My dissertation examines why military businesses privatize after democratization in some countries but not in others. I argue that successful privatization of military businesses is the result of a coherent party system and the presence of an executive with a mandate, after the transition from military rule. Military-owned businesses represent a crucial yet often overlooked dimension of civil-military relations. In many emerging democracies, these enterprises provide armed forces with independent revenue, granting them financial and operational autonomy that can prolong their political influence long after a transition to civilian rule.
Scholars of civil-military relations have long emphasized that democratic consolidation requires reducing the military’s political prerogatives – representation in legislatures or influence over defense policy – that enables it to resist civilian oversight. Previous scholarships also stress that civilian control is incomplete without oversight over the economic resources that sustain the coercive apparatus. Despite acknowledgment of the issue, few studies systematically examine reforms targeting the military’s revenue streams such as privatization, much less explain why some democracies succeed in privatizing military businesses while others allow them to endure – a gap my dissertation tackles.
My dissertation uses comparative historical analysis and process tracing within two most-similar systems designs. I have selected cases on the dependent variable: Argentina (military businesses were privatized), Brazil (military businesses were partially privatized) and Indonesia and Thailand (military businesses not privatized). At the same time, cases vary on the key independent variables namely, coherence of the party system and strength of the executive mandate as well. I find that Argentina achieved successful privatization because both post-transition presidents held strong executive mandates and operated within a relatively coherent party system. In Brazil, only one of the three post-transition presidents enjoyed a strong mandate, and the party system was moderately cohesive, resulting in partial privatization. In contrast, persistent fragmentation in party systems and weak executive mandates in Indonesia and Thailand fostered an environment of intra- and interparty conflicts, leading to gridlock, and enabling the military to retain its economic holdings. Together, these findings suggest that coherent party systems and empowered executives are critical to dismantling military economic power after democratic transitions.