An interesting study on the privitization of security by the govt. can be read at....
http://www.ciaonet.org/isa/mar01/
An interseting quote from it...
Private military companies, as they have come to be known in recent years, seem tailor-made for exactly this kind of need. They often possess great flexibility with an ability to create unique solutions for each case, knowledge about the problem area and operational expertise, business integrity, secure confidentiality, and a completely apolitical nature.
33 When a government chooses to outsource to these companies, then the state bears no accountability for undesired consequences (back to the plausible deniability argument mentioned earlier), deaths of citizens, or moral and legal dilemmas about the legitimacy of an intervention.
34 With virtually all internationally-oriented private military companies emanating from advanced industrial societies, smaller state recipients of their services may believe that such arrangements can reinforce constructive interdependence with the West.
35 Given some of the unusual international circumstances where security services are necessary these days, such as dealing with the protection of international relief workers responding to complex humanitarian emergencies,
36 outsourcing security services to private military companies looks increasingly attractive. These private military companies also serve broader corporation as well as government interests: they offer a means (along with ongoing moves toward diversification and globalization)
37 for militarily-oriented multinationals to maintain profitability during a time of shrinking defense contracts; and they provide an easily-accessible means for other companies not at all involved in security issues to manage their own political risks abroad.
38