Principal Problems

Photo by Nadya So via iStockPhoto / Getty Images

The social science of Wagner Group’s past and future

I am on vacation, so this column is written by Michael Magnani, a Political Risk Researcher based in NYC. He graduated from NYU’s Center for Global Affairs with a concentration in Transnational Security.

If I had a dollar for each time I heard the words ‘Wagner’ or ‘Prigozhin’ this summer, I’d be able to enjoy more than a few meals at West Village’s Via Carota. That’s self-inflicted, partially: I chose to write my graduate thesis on the Wagner Group, only to find that my quiet days in the library were shattered by a staccato of news flashes. The mercenary group failed in its mutiny in late June that arguably presented the greatest domestic threat to Vladimir Putin’s two decade-plus hold on power.

Suddenly, what was Wagner’s future? How would their successful and lucrative operations continue in Syria and across Africa? Would Yevgeny Prigozhin mysteriously defenestrate himself, like so many others that Putin no longer had use for? Ultimately, Prigozhin, along with other key Wagner leaders such as founder Dmitry Utkin, met their fate in late August when the former’s private jet went down over the Russian countryside, a crash U.S. intelligence attributes to the Kremlin.

For all the focus on the group’s future, what is profoundly interesting is its past. Wagner’s history and relationship with its chief sponsor, Russia, can explain how both the state and the non-state will transform in the years ahead.

Georgetown professor Daniel Byman suggests that states, typically weaker ones, are motivated to sponsor terror groups for a variety of reasons including strategic concerns, ideology and domestic politics. Each of these motivations have sub-motivations as well (see Figure 1). While Wagner isn’t universally considered a terror group in the West, proposed and passed legislation originating from the EU, UK and U.S. have suggested this designation is shifting. On top of this, Wagner is an unconventional organization like most terror groups, and engages in many similar activities such as attacks on civilians and natural resource extraction/extortion.

Figure 1: A chart showing the motivations of non-state actors like Wagner Group
Figure 1: A chart showing the motivations of non-state actors like Wagner Group

Russia has long held imperialistic strategic concerns that include projecting power globally. Former prime minister Yevgeny Primakov described Russia’s intentions, in what would come to be known as the Primakov Doctrine, as seeking to counter a U.S.-led unipolar world with a multipolar one in which Russia continues to play the role of a great power.

There’s just one challenge: Russia is not a great power. As its ‘special military operation’ in Ukraine has shown, Russia’s military capabilities are a far cry from what the world once thought of them. Its economy isn’t much better, smaller than all but a handful of individual U.S. states in gross terms.

So how does a wannabe great power act as one on the international stage? Enter Wagner.

As Byman explains, weaker states with limited conventional military forces tend to rely on unconventional groups to carry out their strategic goals. Russia used Wagner for exactly this purpose during the Syrian Civil War in support of Bashar al-Assad’s regime, allowing Russia to carve out a key sphere of influence in western Syria that closely follows territories liberated from ISIS/rebel control by Wagner forces. These territories include a significant portion of Syria’s energy infrastructure, where Wagner was extracting a 25% commission on future revenues. Russia’s sphere runs parallel with the American sphere of influence in the country’s east, stalemating any progress.

In Libya, Russia has used Wagner as a more conventional military force in order to augment Field Marshal Khalifa Haftar and his Libyan National Army (LNA) forces in their campaign against the internationally-backed Government of National Accord (GNA). If Haftar and the LNA won control of Libya, Russia would hold a key seat at the table regarding the future of Libya and could potentially turn the country into a useful client state. On top of this, they could use Wagner’s control of energy installations there as leverage against both Haftar and Europe while also carving out a key sphere of influence along the Mediterranean immediately due south of NATO’s southern flank.

The story repeats elsewhere in Africa and as far flung as South America, but step back for a moment. Among early-stage startups, it’s often hard to get inexperienced CEOs to properly delegate an activity as simple as writing a press release. Putin has delegated whole theaters of combat to a non-state organization to prosecute.

This is an extreme example of a well-studied problem in the social sciences known as the principal-agent problem. No person, organization or government (the principal) can do it all, so they have to delegate tasks to agents — but those agents don’t necessarily have the same motivations or goals as the principal. Hire a consultant, and they suggest hiring more consultants, not solving the problem.

The relationship between principal and agent evolves over time as well, often complicating the original hierarchy. Returning to Byman alongside Cornell professor Sarah Kreps, the two describe how principal-agent dynamics with states and non-state terror organizations break down over time. As Russia has delegated more autonomy to Wagner, Wagner developed its skills and power independent of the Kremlin. As Wagner developed independence, the relationship between state and non-state declines into a host of so-called agency losses that eventually cause the relationship between the principal and the agent to collapse (see Figure 2).

Figure 2: Principal-agent dynamics and how agency losses can come about.
Figure 2: Principal-agent dynamics and how agency losses can come about.

Syria encapsulates this principal-agent collapse, where Russia saw Wagner as having a comparative advantage against more unconventional groups such as ISIS. Putin delegated autonomy to Wagner, which alongside Syrian forces, led offensives that liberated key cities such as Palmyra from ISIS control. Successes such as these may have emboldened the group and furthered their independent nature.

This independence culminated in the Battle of Khasham, an unsuccessful assault in 2018 by Wagner and Syrian forces against a Kurdish/American-held gas facility in eastern Syria. While it is not known whether Russia knew about Wagner’s plans beforehand, they did little to stop American forces from decimating Wagner forces using air power. Russia denied that any of the casualties were theirs (plausible deniability when it suits their interests, another key point of Byman and Kreps’ theory), perhaps hoping a big defeat would bring Wagner back into their orbit.

It was not to be. Emboldened by success in Syria, Wagner became ever more independent and operationally capable. They believed that instead of being an asset of the Kremlin that they were in fact an asset to the Kremlin. This line of thinking was further exemplified by Wagner’s actions during the Battle of Bakhmut in Ukraine last year, where the group largely fought on its own and very publicly came out against Russian military leadership.

As early as 2018, key fissures existed in the relationship between Wagner and Russia that eventually split entirely in Wagner’s attempted mutiny and the ultimate assassination of the group’s leadership in August 2023. Russia relied on Wagner across the globe for years, only taking action against the group when it attempted to carve out an even bigger slice of power.

Wagner’s summer in the limelight has led to much speculation on the group’s next moves. A majority of this speculation can largely be ignored, as Wagner, like many other unconventional groups, has proven notoriously unpredictable and secretive in its actions. Russia is now trying to cobble Wagner’s forces into its own armed forces, merging the principal and agent into one. Synergy, I believe they call it in business, but like any hostile takeover, the culture of the acquisition rarely expires in a quiet death. The fissure between Wagner and Russia still exists, just internally rather than externally. I’m not going to lie, I won’t miss a whirl of words about Wagner or Prigozhin, at least for a few months.

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