Private Security and State

Reading through the Lonely Planet Thorn Tree forum today (a good
resource for travelers), I was struck by a half-asinine post by some
clown who claims that there is crime in Lima, not because people are
poor, but because "people are scum."

The post was only half-asinine because, after making that sweeping
statement, he made a rather well reasoned argument about the ability of
the state to control violence in Latin America. I have no doubt that
the strength of the state has something to do with the high crime rates
here--and I hope that the state will be able to control violence better
in the future, but I also wonder about the role for private security in
the control of violence.

One one hand, I get a kind of perverse kick out of the private security
guards with their shotguns (in Guatemala), AKs (in downtown Lima),
beat-up submachineguns (at a couple of banks in Miraflores) and pistols
(in Cuzco).

On the other hand, there are some real issues of social justice here.
The rich can afford private security. The poor can't. So the people
who experience the worst effects of crime are the ones who can least
afford it.

But on a third hand (I've been working on my ski-boxing), what's the
difference between local government providing security services at the
hands of hired police and community associations providing security at
the hands of hired security providers? And to be honest, a good portion
of the time down here I'd rather have Blackwater protecting me than the
local cops. At least Blackwater's better armed than the criminals
(although the local cops drive those cool Kaiser jeep pickups).

What's the role of private security in the maintenance of law and order
down here? Can there be a market for security which is compatible with
concerns of equity? And what's the correct role for local vs central
government in the provision of these public goods?

One argument for federalism is the idea that some goods are
non-excludable, like national defense. Therefore, these goods create a
free-rider problem. If you get the benefits whether you participate or
not, you'll have an incentive not to pay. And if everybody decides not
to pay, everybody is worse off, because defense won't be provided.
Therefore, we have the state.

And some goods provide benefits at different scales--a good example of
goods that might be better provided at smaller scales is the
environmental protection of watersheds. If you and I live in different
watersheds, and my watershed is threatened, it doesn't make sense for
you to protect my water, because you'll pressure government to spend
less money on protection that won't benefit you, but will cost you
money. It's best to match the size of jurisdictions (or so I will argue
in my dissertation) to the geographic area affected by the problem.

We used to assume that defense is a good best provided at the level of
the nation state. But it seems that, in some places (Iraq comes to
mind), defense at the level of the community makes more sense. What
about other forms of security?