Armed Groups and Principal-Agent Problems

Principal-agent problems are particularly acute for armed group leaders. Such a problem occurs when a leader must delegate tasks to his subordinates, when those subordinates have different preferences and objectives than the leader, and the leader cannot maintain complete surveillance over the subordinates (Shapiro, 2013). The need to operate under a certain level of secrecy due to the nature of conflict against a more powerful state makes surveillance over subordinates and enforcement of leader preferences even more difficult than in a normal organization. Thus, principal-agent problems’ severity will increase as the group’s need for secrecy increases.

Principal-agent problems are particularly acute for armed group leaders. Such a problem occurs when a leader must delegate tasks to his subordinates, when those subordinates have different preferences and objectives than the leader, and the leader cannot maintain complete surveillance over the subordinates (Shapiro, 2013). The need to operate under a certain level of secrecy due to the nature of conflict against a more powerful state makes surveillance over subordinates and enforcement of leader preferences even more difficult than in a normal organization. Thus, principal-agent problems’ severity will increase as the group’s need for secrecy increases.

The level of secrecy an armed group needs can be roughly determined by its level of centralization. Centralization, the amount of control the leaders of a group exercise over the group’s rank-and-file, requires that leaders become more involved in subunit’s organization and actions. This increased monitoring in turn necessitates increased documentation; the bigger the paper trail between the leadership and sub-units, the greater the risk of that paper trail being discovered by the state (Shapiro, 2013). If a group places a higher premium on secrecy, for whatever reason, we should expect it to be more decentralized than groups that do not need as much secrecy.

Typically, the principal-agent problem is thought of in terms of use of violence and financial management: the agents may be using violence or their financial resources in ways the leader does not wish. However, we should also consider group fragmentation as the logical extreme of a principal-agent problem. The leader wants to maintain the group’s structural integrity and cohesion, yet differences of preferences on the use of violence and finances and the leader’s inability to monitor and enforce may lead to agents splitting away from the original group (Kenny, 2010). We should then add leadership-subunit problems to the discussion of principal-agent problems.

Decentralization exacerbates these problems, even while increasing the group’s overall level of secrecy. The subunits of a decentralized group are less reliant upon the leaders for financial and military resources, most of which will come from the local population around which the subunit is operating (Sanin/Giustozzi, 2010). This limits the leader’s ability to impose financial restraints or create programmatic training and indoctrination of recruits. The inability to indoctrinate new recruits particularly complicates principal-agent problems, as indoctrination is key to shifting agent preferences to be more aligned with the leader’s (Hoover Green, 2011). As such, leaders must rely on shared long-term goals, norms, and identities to knit the group together (Weinstein, 2007).

While Weinstein argues that shared norms and goals between the leaders and subunits should mitigate the risks of principal-agent problems in decentralized groups, we should call this into question. Shared goals and norms do not automatically translate into shared strategies and tactics against the state. While agents will be the ones fighting and dying, leaders are more likely to be engaged by the state for negotiations. Different types of state contact may then translate into different leader and agent preferences for actions against the state as the conflict continues (Asal, et. al.,, 2012). Further, shared norms and goals may actually lead to subunit defection, if the subunit perceives that the leadership has strayed from the true purpose of the organization or no longer shares the subunit’s goals (Oppenheim, et. al., 2015). Greater decentralization thus actually increases the likelihood of principal-agent problems and creates higher probabilities of subunit defection.

The Al-Qaeda/Islamic State split is a perfect example of how the need for secrecy leads to decentralization, which in worsens the principal-agent and leadership-subunit problems and leads to divergent preferences and risks of defection. After the American invasion of Afghanistan, Al-Qaeda’s leadership dispersed across the world in an attempt to evade American monitoring.  This naturally made governing the organization difficult, though bin Laden remained the undisputed leader. AQ also recruited widely across the Middle East and encouraged independent terror groups to adopt the Al-Qaeda “brand” and come under its formal leadership, which further diluted the leadership’s ability to control the subunits (Wilson Center, 2016). Zarqawi’s terror group pledged allegiance to AQ in 2004 to become Al-Qaeda in Iraq. Yet AQI’s brutal tactics and focus on the “near enemy” sparked internal conflict between it and al-Qaeda Central (Byman/Williams, 2015). Though AQC attempted to direct AQI towards tactics and ideology that were more in line with its own, it ultimately failed and Baghdadi, AQI’s leader, declared his group an independent movement, the Islamic State (Laub, 2016). Al-Qaeda’s inability to create a level of dependence between its subunits and itself, to directly reprimand unwanted behavior, and to create a uniform ideology which its subunits would adhere to, stem from its desire to maintain a high level of secrecy, to shield it from the American military. This secrecy led to massive decentralization, which created a drastic example of the principal-agent and leadership-subunit problems.

The principal-agent and leadership-subunit problems affect all armed groups. In order to protect themselves from a state’s military, armed group leaders must maintain a certain level of secrecy, which can be achieved through decentralization. The level of secrecy desired will influence how decentralized a group is. Yet this comes with a high trade-off in level of control the leadership can exert over its subunits and agents. Principal-agent problems range from minor disagreements over finances to high risks of group fragmentation. Group leaders will need to devote extensive effort to managing these problems, if they want to maintain real control over their movement.

 

Bibliography

 

Asal, Victor, Brown, Mitchell, Dalton, and Angela. “Why Split? Organizational Splits among Ethnopolitical Organizations in the Middle East.” Journal of Conflict Resolution 56, no. 1 (2012): 94-117.

Byman, Daniel L, and Jennifer R. Williams. “ISIS vs. Al-Qaeda: Jihadism’s Global Civil War.” Brookings, 2015

Hoover Green, Amelia. “The Commander’s Dilemma.” Journal of Peace Research 53, no. 5 (2016): 619-32.

Kenny, Paul D. “Structural Integrity and Cohesion in Insurgent Organizations: Evidence from Protracted Conflicts in Ireland and Burma.” International Studies Review 12, no. 4 (2010): 533-55.

Laub, Zachary. “The Islamic State.” The Council on Foreign Relations. Last updated August 10, 2016. Accessed at: http://www.cfr.org/iraq/islamic-state/p14811

Oppenheim, Ben, Steele, Abbey, Vargas, Juan F, Weintraub, and Michael. “True Believers, Deserters, and Traitors.” Journal of Conflict Resolution 59, no. 5 (2015): 794-823.

Sanín, Francisco Gutiérrez, and Antonio Giustozzi. “Networks and Armies: Structuring Rebellion in Colombia and Afghanistan.” Studies in Conflict & Terrorism 33, no. 9 (2010): 836-53.

Shapiro, Jacob N. The Terrorist’s Dilemma : Managing Violent Covert Organizations. Princeton, New Jersey: Princeton University Press, 2013.

Weinstein, Jeremy M. Inside Rebellion : The Politics of Insurgent Violence. Cambridge Studies in Comparative Politics. New York ; Cambridge: Cambridge University Press, 2007.

Wilson Center “The Jihadi Threat: ISIS Al-Qaeda, and Beyond.” 2016.

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