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2. The public good problem

2.1 The Bundeswehr and the public good "security"

Under Art. 87a of the Basic Law "Installation and deployment of the armed forces" of the Federal Republic of Germany shall be regulated. The task of the BW is the protection of the state and thus the "external security" of the German territory. In direct terms stated in Article 87a of the Basic Law:

(1) The Federation shall establish Armed Forces for purposes of defense. Their numerical strength and general organizational structure must be shown in the government budget.

(2) Apart from defense, the Armed Forces may be employed only if it is expressly permitted by this Basic Law.

(3) The armed forces have the permission to protect civilian property and to perform tasks of traffic control to the extent necessary in order to accomplish their defense mission in the case of a voltage or external danger. In addition, the armed forces may also be used to support police activities in the case of a voltage or external danger to protect civilian property; the Armed Forces shall then cooperate with the competent authorities.

(4) To avert an imminent danger to the existence or to the free democratic basic order of the Federation or the Land, the Federal Government may, if the conditions of Article 91 para. 2 are existent and the Police and Federal Border Police forces are not sufficient, employ the armed forces to support these authorities for the protection of civilian property and in combating organized armed insurgents. The use of force shall be discontinued if the Bundestag or the Bundesrat so demands.

In this way, public good "security" is defined as "internal" and "external security" and the roles of German security forces are clearly stated. The core mission of the Bundeswehr is to maintain and, if necessary, restore external security. The protection of national security, however, is the task of the Police and the Federal Police (formerly Federal Border Police). The use of armed forces inside the country is only possible in a very narrowly defined framework (see also Basic Law Art. 35 with legal and administrative assistance and disaster relief). From the first sentence: The Federation shall establish Armed Forces for purposes of defense. Their numerical strength and general organizational structure must be shown in the government budget. (Art. 87a, sentence 1) follows that the Federal Republic is not just allowed to set up armed forces, but it also must do so in order to defend itself. This implies that the armed forces are maintained adequately with the necessary number of troops and equipment. Through involvement in the budget and parliamentary controls, Parliament sets recruitment parameters for the armed forces in the „Primaries of Politics”⁷. The composition of the armed forces may not form a special stratum within the state but should represent a cross section of the society. Referring to the generation of the necessary personnel competencies of Bundeswehr soldiers in connection with the suspension of conscription in 2011 arises the research question of this work. "What are the best recruitment methods of the Bundeswehr? Not only will the attractiveness of the Bundeswehr as an employer be discussed here, but also the issue of public goods. An army serves no end in itself but the provision of the public good" external security". The legitimization comes from the government and the state has a monopoly on violence⁸.

2.2 Definition and problem of public goods and resources

2.2.1 Definition

Public goods are characterized by two main qualities. Their classification is based on their consumption ability, the properties of rivalry and excludability (Samuelson, 1954). A public good has the property of

A) non-exclusivity and B) Non-rivalry

A "pure public good" has both of these characteristics. If only one of these properties is present, the given public good is an "impure public good". If, for example, only non-exclusivity with rivalry characterizes consumption⁹, the good is a "common good". However, if the opposite is the case, and non-rivalry but excludability is present the goods are "club goods". They are often named artificially scarce goods in or natural monopoly in the literature. If none of these attributes are present, it is a "private good” that is characterized both by rivalry and by excludability. Well-defined property rights are crucial conditions for excludability. Only on the basis of enforceable property rights and copyrights can other individuals be excluded from the consumption of a good, only then can the free and gratuitous access of "freeriders" be denied. For a private good, this is entirely feasible. For a club good this access is tied to the payment of eg a toll or admission charge (these mostly do not to cover the costs of the provision of impure public goods).

In the case of a pure public good, no defined property rights and restrictions can be used (eg air). For a common good, this is also the case, however, consumption rivalry between users prevails (eg deep-sea fishing). This results in a division of pure and impure public goods due to rivalry and access limitation / exclusion as Figure 1 graphically illustrates.

Using this conceptual framework (see also, Mankiw and Taylor, 2009, and Beck, 2011) the good "security" or military can be assigned- in a broader sense - to the following categories¹⁰

- Private security service ((pure) private good)

- Military Museum (artificially scarce good / club good as impure public Good)

- Country / Alliance defense in the case of application for an undersized army (common good as impure public good)

- Country / Alliance defense ((pure) public good)

and

- International Alliance defense (global public good).

Since the existing literature often works with different concepts and diverse examples, the complex summary Figure 2 provides the reader with a comprehensive overview on the public/ private good distinction with respect to externalities in the form of positive and negative externalities, as well as a foundation for defining global public goods (see fig. 2).

Figure 1: Pure and impure public goods

For the military approach, this work focuses on the pure public good¹¹ national defense or collective defense that is consumed as a global public good of the nation / alliance / supranational Community.

The conceptual framework of global public goods (GPGs) has become a kind of reference framework in the global governance debate in the last fifteen years. It provides bilateral and multinational agreements between states as an alternative rationale for supranational cooperation and collaboration and has been extensively discussed in various UN forums (see Schubert and Bayer, 2010, Kaul et al., 1999). For example, in 2002, at the World Summit on Sustainable Development in Johannesburg, the "International Task Force on Global Public Goods" was established. Its task is the provision of various global public goods and developing their financing needs and options¹². While, historically, the provision of public goods has always been a nation-state task, more and more global perspectives are arising with increasing globalization. As the benefit or harm of global public goods or bads transcend national borders, there is a need for increased multinational cooperation. In the military context, the European Union and NATO already took this into practice since 2004 by commissioning of the EU-Battlegroup(s)¹³ and since 2002 by the decision of the establishment of a NATO Response Force¹⁴.

Globalism presents a particular kind of public good that result from the abolition of national (trade) borders and the international interdependence through alliances and agreements. Seen from a worldwide perspective, a nation-state public good is supranational. Therefore, it must be considered as an asset of global public importance due to its global supranational external benefits which taken alone nationally, would also be subject to the issue of public goods. Its efficient provision therefore requires not only national efforts but also a “global public Good¹⁵“.

Political preferences as to what extent and in what ways global public goods should be provided across countries, require a global-normative approach and involvement within the international community. For example, the interim report (2005) of the "International Task Force on Global Public Goods” suggested in addition to international protection goods such as forests, oceans, etc. a responsible international guarantee of the five key global public goods:

- Control of communicable diseases,

- Free trade,

- Knowledge,

- Financial stability and

- Peace and security.

In the context of this work, international peace and security are treated as a global public good, sometimes referred to as international peacekeeping.

Figure 2: Public goods in conflict with private goods, externalities and global public goods

2.2.2. Problem

The problem of provision of (global) public good security in the form of state / collective defense arises from the non-exclusivity due to its large external benefits for all individuals. In market terms, not all users of this good would be willing to pay for its investment and maintenance costs. The problem of collective¹⁶ by using public goods arises from an incentive problem: individuals who are not providing any contribution can still acquire the benefits of the goods, because they cannot be effectively excluded from using them. It is called the "free rider problem". Consequently, external security is not, or not to a sufficient extent, provided by private companies on the market¹⁷. Therefore, in case of a public goods market failure, state intervention is necessary. A provisional improvement (see also Pareto improvement) of the overall social welfare as a sufficient condition for state intervention applies to public goods such as external security. Figure 3 (Holler and Illing, 2005) illustrates the game-theory approach for non-excludability and the free rider problem with a simple example in table form.

Figure 3: Prisoner's dilemma

This simple example is the so-called "prisoner's dilemma¹⁸". Neither individual A nor B contributes to the provision of the public good of external security, even though both would be better off if everyone would contribute to the provision. The dominant strategy of both individuals is not contributing, so that the Nash¹⁹ Equilibrium in a Payoff from "0 ; 0" prevails. If both cooperate and contribute, the payoff would be "1.5 ; 1.5", so the state intervention and state provision of public good is justified. This example can be applied with modifying "contribute - not contribute" to "peace - war & military - no army" or "neighbor has no army - neighbor has an army and having no army - having its own army".

The "free rider problem", the central issue for the provision of goods with large external benefits remains: welfare optimization cannot be solved without State intervention and the provision of public goods through the collection of compulsory levies cannot be solved welfare optimal (see Beck, 2011). Several further problems arising are public debt, crowding out, rent-seeking, etc. These will not be discussed here further.

For this study, the preceding consideration of goods deployment justifies the legitimacy of the government providing the "public good Bundeswehr" because it fulfills the task of implementation and deployment of "(external) security" for Germany.

2.3 The provision of „security “

2.3.1 The term „security “

The term security is generally understood as the state of safety, the managed protection from danger and damage, as well as the highest possible exemption of hazards. In the military context it is often associated with peace or the absence of war, although this expression could theoretically range from a world full of pacifists to a world full of police states with the potential threat of total mutual destruction at any time. From a more realistic viewpoint, national security has the prevention and protection measures to maintain fundamental and human rights in their respective scope. Political decision-making processes on both national and international level dictate how to act socially appropriate. The concepts of safety and security relevance have substantially changed and expanded over time. Security can be divided in four different dimensions:

- Reference dimension,

- Material dimension,

- Space dimension and

- Danger dimension²⁰

With respect to the reference dimension, the State and the protection of State sovereignty is no longer the primary reference object. Rather, the safety of the society and its individuals should be guaranteed. Here, security is assumed as a precondition of a free and self-determined life, which has to be provided by the State for its citizens.

In the material dimension, in addition to the military and police security components, the political components of economic, environmental and human security are considered due to the increasing globalization.

Regarding the space dimension in its geographical framework, a similar change in security aspects took place through military and economic alliances (see also globalization). Security is no longer a political issue exclusively on the national level, but also on regional, international and global level. Therefore, security is a "global public good".

The danger dimension analyzes the potential hazard or potential disruption of security. After the end of the Cold War and the disappearance of specific threats, potential conflicts today have become somewhat unclear and difficult to define and often depend on ideological or economic conditions. These potential conflicts are frequently asymmetrical and often predict that a little and often completely unknown aggressor will have the advantage of surprise against State security structures. A selective social vulnerability is brought to the fore and a "war of nations" has become unlikely. Due to the different dimensions and their complexity and interaction, the term safety becomes a complex issue that goes far beyond trivial black and white thinking. (see Stuchtey et al., 2013, and Daase et al., 2013).

Figure 4: Procedural representation of a State conflict prevention strategy

This is also reflected in the thought-provoking impulse by General a.D. Schneiderhan (2013) to bolster the reserve forces. As he confirmes, security has become far more complex and cannot be guaranteed in a battle as seen formerly, but can only be achieved by mitigating the permanent threat of attack. Conflicts no longer take place on the battlefield, but through attrition. Whoever is wealthy nowadays can potentially provide all that is necessary for the use of violence.

In this context, profits are often privatized and made by criminal means, whereas the cost of violence and conflict for society are socialized. Terrorists are not necessarily the source of conflict but they are often ideologically acting as free-riders and beneficiaries of conflicts. The question not asked often enough here is: Who are the monetary beneficiaries and "sponsors" (Schneiderhan, 2013) of crises and conflicts? We may not forget the existing conflicts over our vital raw materials and resources, particularly access to safe drinking water which is already critical in some places. A complex process to maintain or restore security and order results from an early conflict prevention strategy (see fig. 4) characterized by prevention, intervention crisis remedy and precaution.

Nevertheless, the public perceives only a limited picture of external security. Contributes to this, the selected media coverage is an important factor. Because the reader or viewer of news is usually even not directly affected by the use of the soldiers, it is tangent to the bit. A personal involvement often results only from a perceived monetary contribution (government military spending). Therefore a generation responsibility for security as a basic human need (Schneiderhan, 2013) would be something to aim for. It´s to be hoped, that this issue of global public goods further engaged in a social focus.

2.3.2 An imperfect market - (no) place for an army

In the (social²¹) market economy, production and consumption is controlled by market prices. The market here has a discovery function and the task to allocate scarce resources the best possible way. But this applies only to private goods, because for both pure and impure public goods, the consumers are not or only partially responsible for the costs of providing these goods. This leads to a market failure: the provision of the public good would be carried out inadequately or not at all in the market (Beck, 2011, Mankiw and Taylor, 2009). For example, in case of national defense by the armed forces, no one in the country can be excluded from the external benefits of the army. An army has a defensive effect for the whole country and therefore for all individuals, even if they may negate - for example as a pacifist - that protection. There exists a “compulsion to consume”. Through these external benefits and non-exclusivity yields the free-rider problem. Because the individual cannot be excluded from consumption and the benefits brought by them, he/she will not be willing to make a financial contribution to the provision of the good if he/she can get it also for free. Here comes the necessity of cooperation, instead of market-based competition. In case of the state it is a forced cooperation or a mandatory community of interests of all citizens to the tax-financed provision of the public good defense. Since this has significant external benefits, many would probably refuse a voluntary contribution for the army and hope that this will be externalized. Thus, an individual rationalism would lead to collective irrationality (see fig. 3). For this reason it is easy to understand that the state does not ask for voluntary contributions, but raises compulsory levies in form of taxes, among other things, to serve the public good.

Therefore, it will be politically negotiated to what extent military security ought to be provided to the society and how to overcome market failures in the provision of the public good provincial / alliance defense by a state intervention in the imperfect market.

2.3.3 Demographics strength, sustainability and recruitment requirements of German Armed Forces in the medium and long-term point of view

Based on the progress report on the reorientation of the Bundeswehr (German Armed Forces report 2013²²) of 8 May 2013, demographics strength is of particular importance regarding the recruitment requirements of German armed forces. The demographic development in Germany has to be considered by the Bundeswehr in its plans and the future demographic trends shall be built. Currently, the Bundeswehr can properly fulfill their personal recruitment needs even after the suspension of the compulsory basic military service. But in the long term it will become more difficult for the BW - as for all employers - to attract qualified new staff in sufficient numbers. It is, therefore, a key objective of the realignment to ensure balanced and sustainable staffing deployable structures. The Bundeswehr is becoming smaller in accordance with the specification of the political cornerstones. In the future, the entire staffing level will be around 240,000 civilian and military members in the army. The new recruiting organization should ensure recruiting of up to 185,000 soldiers and 55,000 household points for civilian employees. To keep these numbers, the Bundeswehr used to have annually about 60,000 applicants in order to be able to make a selection decision between applicants for high quality hiring. The desired ratio at the current time between professional soldiers and annual applicants is approximately 124,000 to 55,000. This is an ambitious goal, as the competition with other economic competitors is becoming sharper. The future generation is anticipated to be only about 650,000 young people annually (mainly literally taken from: Bundeswehr report (2013), report on the state of the reorientation of the Bundeswehr, May 8, 2013 FMOD, pp 16-17). From this self-knowledge and self-determination of the Bundeswehr, derives a particular importance of the recruitment possibilities in a military context. This will be scientifically analyzed and examined in a separate study.