A STUDY INTO THE SIZE OF THE WORLD S INTELLIGENCE INDUSTRY

Transcription

1 A STUDY INTO THE SIZE OF THE WORLD S INTELLIGENCE INDUSTRY CHRISTIAN HIPPNER A Thesis Submitted to the Faculty of Mercyhurst College In Partial Fulfillment of the of the Requirements for The Degree of MASTER OF SCIENCE IN APPLIED INTELLIGENCE DEPARTMENT OF INTELLIGENCE STUDIES MERCYHURST COLLEGE ERIE, PENNSYLVANIA OCTOBER 2009

2 DEPARTMENT OF INTELLIGENCE STUDIES MERCYHURST COLLEGE ERIE, PENNSYLVANIA A STUDY INTO THE SIZE OF THE WORLD S INTELLIGENCE INDUSTRY A Thesis Submitted to the Faculty of Mercyhurst College In Partial Fulfillment of the Requirements for The Degree of MASTER OF SCIENCE IN APPLIED INTELLIGENCE Submitted By Christian Hippner Certificate of Approval: Kristan J. Wheaton Associate Professor Department of Intelligence Studies James G. Breckenridge Chair/Assistant Professor Department of Intelligence Studies Phillip J. Belfiore Vice President Office of Academic Affairs October 2009

3 Copyright 2009 by Christian Hippner All rights reserved. iii

4 ACKNOWLEDGEMENTS I would like to thank my primary reader, Kristan Wheaton, for his creativity, found throughout this product. I would also like to thank Carl Hippner for his assistance in interpretation. Finally, I would like to acknowledge Cole Davis for his technical assistance and motivation, despite having a two o clock meeting. iv

5 ABSTRACT OF THE THESIS A Study into the Size of the World s Intelligence Industry By Christian Hippner Master of Science in Applied Intelligence Mercyhurst College, 2009 Professor Kristan J. Wheaton, Chair [This thesis determines the approximate size of the world s intelligence industry in quantitative terms. It reviews existing literature which describes, in qualitative terms, various themes found about intelligence agencies around the world. The thesis provides a quantitative method to estimate unknown intelligence spending and personnel. The study concludes that the world s intelligence industry spends approximately 106 billion United States Dollars, and employs about one million people. Furthermore, the hypothesized direct correlation between Gross Domestic Product (GDP) and intelligence spending may exist, but the research does not strongly support the assertion. It is apparent that GDP is a factor when it comes to intelligence spending, but it does not seem to be the primary component.] v

6 TABLE OF CONTENTS Page COPYRIGHT PAGE... iii ACKNOWLEDGEMENTS... iv ABSTRACT...v TABLE OF CONTENTS... vi LIST OF TABLES... viii LIST OF FIGURES... ix CHAPTER 1 INTRODUCTION LITERATURE REVIEW... 4 Information Gap... 4 Comparative Studies in Intelligence... 7 Self-Reporting Countries Systematic Studies of Intelligence METHODOLOGY Data Collection Collection from Internet Sources Collection from Other Sources Other Relevant Information Collection Establishing Webpage Credibility Process for Estimating Unknown Spending Process for Estimating Unknown Personnel Standardizing Spending Units Standardizing Personnel Definitions RESULTS The Totals: Spending The Totals: Personnel Other Extracted Results Summary of Results CONCLUSION vi

7 BIBLIOGRAPHY APPENDICES Appendix A: Websites You Can Trust Appendix B: Intelligence Spending Sorted Highest to Lowest Appendix C: Data for Individual Countries vii

8 LIST OF TABLES Page Table 4.1 Affect of US on Estimating 39 Table 5.1 List of Journals, Newsletters, and Other 56 Relevant Database Productions Table 5.2 Outcome of Assuming Intelligence Spending 59 and GDP is Linear or Exponential viii

9 LIST OF FIGURES Page Figure 4.1 Total World Intelligence Spending 33 Figure 4.2 Top Ten Percent Intelligence Spending 34 Figure 4.3 Intelligence Spending Sorted Largest to Smallest 37 Figure 4.4 Total Intelligence Employment 40 Figure 4.5 Geographic Position of Top Intelligence Employers 42 Figure 4.6 Top 21 Intelligence Employers 42 Figure 4.7 Comparing Intelligence Spending Per Person 43 Figure 4.8 Bottom 90 Percent Employment vs. 44 Top Ten Percent Employment Figure 4.9 Countries with Top Spending and Employment 45 Figure 4.10 Histogram of Intelligence Employment 45 Figure 4.11 Histogram of Source Credibility 50 Figure 5.1 Affect of a Linear Relationship Assumption on 61 Intelligence Spending (US Not Included) Figure 5.2 Countries with Known Intelligence Spending with 62 Trend Lines (US Not Included) ix

10 1 INTRODUCTION This thesis is about intelligence in national security. Since the Treaty of Westphalia every nation-state has had concerns about its national security, however defined. The role of intelligence is one that supports policymakers, military commanders, and nation as a whole. Describing the actual process of intelligence is the subject of many books, reports, and theoreticians. Although the traditional view of intelligence encapsulates its activities as a cylindrical process, new conceptual models tend to structure it around a collaborative targeted process. Regardless of how one wants views what is intelligence, this thesis is about those engaged in it as a whole. Intelligence as field of employment dates back to biblical days, when Moses sent 12 men to the land of Canaan in order to, See what the land is like: whether the people who dell in it are strong or weak, few or many; whether the land they dwell in is good or bad; whether the cities they inhabit are like camps or strongholds; whether the land is rich or poor; and whether there are forests there or not. 1 Moses is a decision maker who wants to know everything that may be relevant, as his tasking implies. He asks for reports on the economic, military, and social situation of Canaan. While this passage is infamous in some intelligence communities, Sun-Tzu s writings may resonate in others. With the relatively few exceptions, the subject of how to finance the collection of intelligence is generally missing. Collection systems, or in Moses case human operators, require adequate funding to be successful. It is 1 Numbers 13:18-20 (New King James Version).

11 2 unimaginable that Moses sent 12 men who were heads of the children of Israel without food or other provisions. 2 Yet discussion regarding this subject is absent. If intelligence requires funding, like the rest of the national security establishment, then every nation must allocate a budget. Various studies aiming to estimate national defense spending already exist. Some countries issue so-called white papers, while research institutions, such as the Stockholm International Peace Research Institute (SIPRI) and the International Institute for Strategic Studies (IISS), have elaborate methodologies to determine the spending of countries that do not self-report. While each entity has a particular estimate regarding the world s spending on defense, none have ventured into a more nuanced subset of national security intelligence. This thesis is a study to determine the approximate size of the world s national intelligence industry. It uses two separate indicators to determine size. The first indicator is intelligence spending by individual nations. The second indicator of size is intelligence personnel under employment by individual nations. For the purposes of this study, the components of the intelligence industry are, broadly speaking, services or agencies that are direct divisions of a recognized government. Understanding the size of the world's intelligence industry is significant for three reasons. First, there is no existing study with the purpose of discovering the approximate size of the global intelligence industry. Second, understanding its size can be useful for allocating resources by US intelligence agencies. Third, knowing the size of the world's intelligence industry would be helpful to educational institutions for their own planning. As the intelligence studies field grows, knowing the relative level of demand for professionals in this market will likely support these institutions in recruiting practices. 2 Numbers 13:3 (New King James Version).

12 3 To that end, a comprehensive and quantitative study is necessary. Although there are numerous smaller studies that focus on certain regions or nations, they all fit into the realm of qualitative discussions. While they add to the body of literature for this field, they fall short of exploring the human resources aspect. The study could also assist in training institutions recruitment by indicating the job market that exists for intelligence professionals. Determining the size of the world s intelligence industry is also relevant for practitioners. A study of this nature would give a national intelligence community another method to benchmark their performance, as well as assist in future planning. Knowing the relative size of other nations capabilities can result in more efficient resource allocation or support new hiring practices. There are certain limitations to this study. First, it does not intend to study the organizational structure of an intelligence community of a given country. It simply wants to determine an amount spent by that community. Second, governments are not always willing to publish such data and if they do, it may be intentionally inaccurate. This study can and will make the most accurate and conservative estimates as possible. A person can delve deep into government publications and other primary data for years in an attempt to determine a single precise answer. This is unnecessary due to the scale of the study the individual numbers are more likely in the hundreds of millions of dollars, meaning that the impact of relatively few dollars is negligible. Third, for many countries there is no existing information at all. This study estimates these figures using a process described in Chapter 3, and then presents its findings in Chapter 4.

13 4 LITERATURE REVIEW There are a limited number of comprehensive studies into the world s different intelligence systems and agencies. Most studies on the topic of national intelligence communities are qualitative in nature. They explore a variety of intelligence related topics, such as structure and oversight, but few actually engage in describing their subject in quantitative terms. The following literature review has four sections. The first section briefly discusses why there are few systematic studies describing intelligence in quantitative terms. The second section discusses the different comparative studies of intelligence systems. The third section examines countries with self-reported data, their relevance, and their drawbacks. The fourth and final section looks at the existing attempts to systematically document different intelligence communities. Information Gap There are no comprehensive studies analyzing the total spending of the world s different intelligence organizations, or are there studies indicating their accumulated size. One argument against the systematic study of intelligence is that the systems in different countries are not comparable. In the words of author Michael Warner, both inside and outside scholars have sought to compare and contrast intelligence disciplines and organizations across multiple national experiences and time periods. Unfortunately, this is not yet possible to do in a systematic manner. 3 This mindset is perhaps the primary reason for the lack of research into these matters. However, arguing that a transnational quantitative comparison is not possible hinges on faulty assumptions. 3 Michael Warner, Sources and Methods for the Study of Intelligence, in Handbook of Intelligence Studies, ed. Lock K. Johnson (London and New York: Routledge, 2007), 25.

14 5 The argument assumes that the functions, roles, and missions of intelligence organizations are inconsistent in international situations and cannot be categorized. Notable intelligence scholar Loch K. Johnson argues against this point, saying that there are basic common features found in all national intelligence apparatuses. According to Johnson, there are three basic activities of these governmental entities collection and analysis, covert action, and counterintelligence. 4 He argues that these three activities are universally found in all national intelligence systems, regardless of the security environment surrounding the country. This point seems to echo in the writings of Marina Caprini, a theoretician on security-sector reform, who says that within government, intelligence has come to be thought of as comprising four main activities: collection, analysis and estimates, counterintelligence and covert action. 5 At the heart of the three activities, Johnson argues, is national wealth Gross Domestic Product (GDP). 6 Johnson would likely argue that the security situation around a nation impacts intelligence spending less than its national wealth. Of wealthy nations, he says, Because of the breadth of their concerns, not even expenditures in the range of $35 billion a year (the widely reported figure for U.S. intelligence in ) can offer transparency for the entire globe especially when adversaries choose to conceal their schemes and weapons systems in deep underground caverns, with camouflage, or by other methods of stealth to avoid the prying lens of satellite cameras orbiting above them. In contrast, the intelligence objectives of smaller nations are much more limited, say, to a single region or even a solitary enemy. Some may view this paradox as self-evident, but comparisons of the intelligence systems of different countries are often made without taking into account the differences in their funding abilities and targeting needs. 7 4 Loch Johnson, Bricks and Mortar for a Theory of Intelligence, Comparative Strategy. 22, no. 1 (2003): 1. 5 Marina Caparini, Controlling and Overseeing Intelligence Services in Democratic States, in Democratic Control of Intelligence Services: Containing Rogue Elephant, ed. Hans Born and Marina Caparini (England: Ashgate, 2007), 5. 6 Loch Johnson, Bricks and mortar for a Theory of Intelligence, Comparative Strategy 22, no. 1 (2003): Ibid, 3.

15 6 Outside of national wealth, Johnson argues that other attributes are necessary for successfully implementing these activities, such as focused targeting, all-source synergism, and strong communication. 8 These activities are important, but they are a result of three basic features, collection and analysis, covert action, and counterintelligence. The ultimate goal of these activities is to reduce the level uncertainty for the decision-maker. The end goal for national intelligence agencies is also inherently different from other governmental entities with similar features. enforcement bodies often engage in Johnson s three basic actives. For instance, law They collect and analyze crime statistics in order to identify problems and determine the best preventative measures. 9 They engage in undercover operations, as well as establish security measures to prevent the dissemination of sensitive information. In short, many law enforcement agencies engage in intelligence. However, the purpose of having a law enforcement agency is to enforce laws, while its end goal is to facilitate crime and problem reduction. 10 Nevertheless, the primary attribute for the successful implementation of Johnson s activities is national wealth, suggesting that only wealthy nations have large, integrated, intelligence systems. Yet Johnson is quick to admit that there are some exceptions to his 8 Ibid. 9 Veronica Coleman and others, "Using Knowledge and Teamwork to Reduce Crime," National Institute of Justice Journal 241, (1999): 18-20, 10 Jerry H. Ratcliffe, "Intelligence-led policing: Anticipating Risk and Influencing Action," in press 2009, 3, Anticipating%20risk%20and%20influencing%20action.pdf.

16 7 theory. 11 He points to Russia as an example, saying while it may maintain a large intelligence service, it is not an affluent nation. 12 Johnson s conceptual framework seems to suggest an observable correlation exists between a nation s wealth and the size of its intelligence community. If this is true, further research is necessary to test Johnson s assertion that national wealth, GDP, determines the limits of intelligence activity. While most authors tend to focus intelligence issues such as oversight, democratic control, and the significance of 9/11, Johnson s assertion is measurable in quantitative terms. His assertion is not only quantitative but free from cultural biases. The next section reviews existing comparative studies of intelligence, which are predominately qualitative in nature. Comparative Studies in Intelligence There are several ways existing comparative studies describe different intelligence systems. The first section here describes intelligence in the context of the Cold War, the second section describes intelligence through the lens of the Civil-Military Relations (CMR) model, and the third section describes intelligence from the nonwestern perspective. Common themes exist throughout all three sections, for instance, all of the authors use a case-study format to compare intelligence systems. Each case-study uses narratives and qualitative information to describe intelligence communities another theme in all three sections and also tend to focus on research at the national level. There are several reasons to conduct comparative studies of intelligence communities. According to Peter Gill, conducting comparative studies allows one to find out about 11 Loch Johnson, Bricks and mortar for a Theory of Intelligence, Comparative Strategy 22, no. 1 (2003): Ibid.

17 8 one s own country through the study of others. 13 He adds that comparative studies also allow for the generalized classification of data. 14 Beginning to classify data is the intuitive starting point towards quantification. While comparative studies of intelligence are steadily increasing, they are not a new phenomenon. One example, written 1985, is Walter Laqueur s A World of Secrets: The Uses and Limits of Intelligence. Laqueur compares the intelligence systems in open societies and the Soviet Union during the Cold War. 15 He compares these entities in order to identify differences between the western world and Soviet bloc. Laqueur s writings on open societies tend focus on the relationship between intelligence producers and consumers in the United States, United Kingdom, Germany, and Israel. 16 He arranges each chapter consistently, initially providing a brief overview of the national intelligence community, and then he gives examples of their interactions with civilian authorities. He also compares the performance of the intelligence communities by addressing issues such as the inefficient bureaucracies within some large agencies, and analyzing the public s perception of the intelligence community s activities. 17 Wellwritten, well-thought out, Laqueur gives a critical analysis of intelligence in open societies, but his method of comparative studies does not venture beyond qualitative research. Laqueur approaches Soviet intelligence from a slightly different angle. He looks at Soviet intelligence from a historical perspective, first describing its revolutionary roots, 13 Peter Gill, Knowing the Self, Knowing the Other: The Comparative Analysis of Security Intelligence, in Handbook of Intelligence Studies, ed. Lock K. Johnson (London and New York: Routledge, 2007), Ibid. 15 Walter Laqueur, A World of Secrets: The Uses and Limits of Intelligence (New York: Basic Books, 1985), Ibid, Ibid, 228, 231.

18 9 then moving to its most recent structure. 18 He describes the relationship between the Soviet Union and the other communist nations as unequal, where the smaller nations tend to aid the Soviets. 19 Laqueur s historical approach is different than his methods used to compare the various open societies. The dichotomy in approaches makes it difficult to have a transnational comparison. One example is his description of the Soviet Union s intelligence structure he focuses more on the weaknesses in their operations, rather than comparing different agencies to one another. 20 While he explains in some length about the relationship between intelligence producers and consumers in open societies, he glazes over the subject when writing about the Soviet system. Instead, his focus remains more on its historical development and current defects. 21 Other comparative studies use the Civil-Military Relations (CMR) model to compare intelligence communities. Scholar Robert Jervis says the role of intelligence is the missing dimension in international relations and advocates using the CMR model. 22 There are some interesting parallels between CMR studies and other studies analyzing relations between civilian authorities and intelligence services. According to Jervis, the general view of intelligence services and militaries is that they should be strong, efficient, and professionalized, but on the other hand they should not set their own goals and they must respond to civilian authority We want the military and intelligence to be 18 Ibid, Ibid, Ibid, There are a number of writings on the defects of the Soviet intelligence apparatus and Laqueur s discussion is not entirely out of context. A more recent writing on this subject comes from Michael Herman in Intelligence Services in the Information Age. Herman discusses the role of the intelligence services in under Stalin and how their assessments were intentionally subjective. This continued after Stalin and exemplifies one difference between western intelligence and non-western intelligence. See Michael Herman, Intelligence Services in the Information Age (Portland, Oregon: Frank Cass Publishers, 2001), Robert Jervis, Intelligence, Civil-Intelligence Relations, and Democracy, in Reforming Intelligence: Obstacles to Democratic Control and Effectiveness, ed. Thomas Bruneau and Steven Boraz (Austin, Texas: University of Texas Press, 2007), xix.

19 10 under civilian control but also to resist illegitimate orders. 23 Studies using the CMR analogy generally fall into two broad categories, intelligence in modern democracies and intelligence in emerging democracies. The overall focus in each category is how to increase democratic civilian control over the intelligence organization of a given country. 24 Democratic civilian control is possible by giving legal oversight authority to the executive, legislative, or judicial branches of government. According to authors Steven Boraz and Thomas Bruneau, a favorite oversight mechanisms used by governmental bodies is budgetary review. 25 They argue that in modern democracies, executive bodies exercise budgetary control through advisory departments, such as the Office of Management and Budget (OMB). 26 However, they are clear that budgetary review is not the only oversight tool at the disposal of the executive bodies. Boraz and Bruneau both agree that legislative bodies are able to control intelligence activities through budgetary control and fund allocation. 27 Legislative bodies accomplish budgetary oversight by establishing oversight and appropriations committees. 28 The CMR model analyzes intelligence spending as a way to keep these organizations under the control of elected officials, and ultimately to learn about the effective practices of well-performing nations. However, these comparative case studies tend to introduce a certain level of Western-bias into their methods. This creates two problems. The first is whether or not a nation is measurably democratic. For countries conceptualized as undemocratic, the 23 Ibid, xiii. 24 Steven Boraz and Thomas Bruneau, Best Practices: Balancing Democracy and Effectiveness, in Reforming Intelligence: Obstacles to Democratic Control and Effectiveness, ed. Thomas Bruneau and Steven Boraz (Austin, Texas: University of Texas Press, 2007), Ibid, Ibid, Ibid, Ibid, 45.

20 11 national intelligence system is automatically exempt from study. If the goal is to observe how various democratic nations maintain or create civilian control over their intelligence services, countries such as China or Burma, which are generally seen as undemocratic, cannot be studied for comparison. The likely underpinning argument for this point-ofview is that civilian control is desirable. The second problem addresses the subjectivity of what is desirable. Civilian control is desirable for whom? Iran has a standardized election process, yet would the West prefer to deal with the Supreme Council or the former Shah? If the ultimate purpose of using the CMR model to study national intelligence systems is to learn how to increase civilian control, then it is preferable to study Iran under the Supreme Council. Using CMR as model creates the assumption that more civilian control is a good thing (the researcher is inclined to agree). However, the Western bias that enters into these studies results in inappropriate comparisons. These comparisons may include budgetary reviews to satisfy the old adage follow the money but not to study transnational spending patterns. A third body of comparative literature might counter cultural bias, as it attempts to gather knowledge about non-western intelligence systems. This literature comes from native contributors and it provides descriptions of the strategic intelligence environment of a non-western country. 29 According to one author, the primary purpose for this accumulated research is to, Provide some counterweight to the liberal democratic domination of the literature, especially Anglo-American. Specifically it is important to describe and analyze a wider range and variety of national intelligence systems in order to counter any simplistic assumptions that Anglo- 29 Peter Gill, introduction to the PSI Handbook of Global Security and Intelligence: National Approaches, vol. 1, ed. Stuart Farson et al (London and Connecticut: Praeger Security International, 2008), 1.

21 12 American models provide a reliable guide to present or, necessarily, future arrangements elsewhere. 30 As the quote suggests, studying other intelligence systems can allow for greater selfinspection, may result in empirical material suitable for comparison, and can counter the biases built into the CMR model. 31 However, these studies are generally inconsistent in the intelligence attributes they analyze. Some of these studies describe the internal structure of an intelligence system, while others discuss issues relating to civilian oversight. In short, Laqueur s problems manifest themselves once again, only now it is in a multi-polar world. Some of these studies are subsections of defense sector reviews likely a result of their publishing venues. For instance, Anthony Cordesman and Khalid Al-Rodhan write about the military forces of nation-states in the Persian Gulf. 32 Their study reviews nine countries, each of which includes a section titled Paramilitary, Security, Police, and Intelligence Forces. 33 These sections include a brief biographical background along with limited quantitative data. Yet, many of these defense sector reviews tend to emphasize the military aspect over the intelligence component. An example of a robust defense review is The Middle East Military Balance: , edited by Shai Feldman and Yiftah Shapir. The review gives a weapons inventory for twenty-one Middle East countries. 34 The authors provide general information about individual economic and 30 Ibid. 31 This point is articulated by Peter Gill, although he does indicate what material can produce empirical data. See Peter Gill, Knowing the Self, Knowing the Other: The Comparative Analysis of Security Intelligence, in Handbook of Intelligence Studies, ed. Lock K. Johnson (London and New York: Routledge, 2007), See Anthony Cordesman and Khalid Al-Rodhan, Gulf Military Forces in an Era of Asymmetric Wars (Connecticut: Praeger Security International, 2007). 33 Ibid. 34 Shai Feldman and Yiftah Shapir, eds., The Middle East Military Balance: (Massachusetts: MIT Press, 2001).

22 13 arms procurement programs for each country only after which do they give an order-ofbattle for each military branch. Exploring countries in such a comprehensive manner allows the authors to create international benchmarks and compare levels of military prowess. Studies this detailed are not present in the current body of comparative studies of intelligence. Another example of a defense sector review with a subsection on intelligence is Jane s Information Group. Its Sentinel Country Risk Assessment Library attempts to provide a comprehensive list of entities related to every nation s security apparatus. It is a very valuable resource for those looking to obtain quick and general information about the security situation in a country. For many nations, the library is also successful in identifying their various intelligence agencies. While the information most pertinent to this study comes from Jane s Sentinel Country Risk Assessment Library, the majority of the company s intelligence related information is in Jane s Intelligence Review and Intelligence Weekly albeit in qualitative form. While some comparative studies discuss the interaction within the described national intelligence system, others provide a detailed account of the weapon systems in possession of each country. Each provides a response in a narrative format. As with all comparative studies, there is a certain measure of variance between each observed country. According to Peter Gill, the variance in national approaches reflects the conditions of the individual nation itself. 35 In western democracies, writers tend to describe intelligence as something in need of reform, whereas in non-western nations, 35 Peter Gill, introduction to the PSI Handbook of Global Security and Intelligence: National Approaches, vol. 1, ed. Stuart Farson et al. (London and Connecticut: Praeger Security International, 2008), 15.

23 14 they are entities to support the ruling party. 36 Nevertheless, these contributors add to the comparative body of intelligence studies, although, they are a reflection of the qualitative approach. Self-Reporting Countries One body of literature relative to this thesis consists of countries opting to publish information about their individual intelligence organizations and programs. Although uncommon in most of the world, self-reporting can provide a wealth of information. Self-reporting countries can provide unique views of those within the intelligence establishment, as well as insight on the organization s operations or how they interact with top decision-makers. It gives other qualitative information about their internal arrangements, decision-making process, and other data that is also useful for comparative research. Specifically, self-reporting countries are important to this thesis because they contain budgetary and workforce data. Quantitative data is necessary to create a benchmark and begin creating estimates in any study with unknowns. Thus, this quantitative data allows the study to estimate unknown intelligence spending and personnel the explanation of this process is in Chapter 3. There are various reasons why a country would publish its intelligence community s budgetary and personnel data. Some countries report their intelligence budgets because of their own rules and regulations, generally in an attempt to provide oversight. The US is an example of a country which requires its intelligence community to regularly report its budget. Yet there are some drawbacks to how it reports. For 36 Ibid.

24 15 instance, reporting the intelligence budget does not occur on an annual or semi-annual basis, only periodically with no set schedule. Infrequent and irregular reporting is a problem for researchers attempting to create a trend analysis for a case study. Fortunately, this study is not trying to analyze spending at the individual country level, and therefore the most recent published data ought to suffice. The US also demonstrates another problem with self-reported budgetary data. In previous reported amounts, the US exempted the budget for the Military Intelligence Program (MIP). Created in 2005, the MIP represents all intelligence spending under the Department of Defense. 37 Similar defense programs such as the Tactical Intelligence and Related Activities (TIARA) formerly encompassed the department s spending, and were not disclosed. 38 Excluding part of the total intelligence budget is a common problem. When nations do report their intelligence spending, it tends to only represent certain programs or agencies. Nevertheless, the solution to this problem usually requires more research. The obvious problem with reporting individual programs or agencies is that it becomes a bit more complex in counting, or more specifically, ensuring that none are absent from the total. Canada is one example. Although it is not legally required, each agency includes a budget within its own annual report. These reports usually discuss operations, ability to meet customer demands, and budgetary data. While much of the qualitative information here assists this thesis by ensuring the agency meets Johnson s conceptual framework, it does not identify other agencies or programs. To be sure that 37 Congressional Research Service, Intelligence Issues for Congress," US Library of Congress, Order Code IB10012, May 9, 2006, 6, 38 Ibid.

25 16 one identified the correct number of intelligence entities, secondary sources must be consulted. These problems are not unique to financial matters. Indeed, similar problems exist with sources that report on personnel. One example is Japan, which publishes a lot of information on their intelligence establishment. However, the Land of the Rising Sun has five distinct intelligence agencies which apparently do not report to a single oversight entity. The end result is that, while information exists about the employment practices of the Japanese intelligence agencies, it becomes somewhat difficult to correctly identify each one and find its total personnel. Nevertheless, the nations that do self-report intelligence data are valuable to this study. While the reports are sometimes dense and qualitative, the quantitative data budgets and personnel figure are like golden nuggets of information. In many cases, reporting these figures is a matter of legality, while others report simply due to agency practice. This body of literature, nations which opt to publish quantitative data, is far from being universal most are generally considered part of Western society. Regardless, the geographical spread of self-reporting nations is worldwide. Systematic Studies of Intelligence Despite the lack of comprehensive quantitative research, there are two prominent studies attempting to catalog the world s intelligence agencies. Each study has substantial benefits and provides a solid starting point for quantitative research. However, each study approaches cataloging their information by using different methods. Uniformity between these studies is certainly lacking. Before discussing them further, it

26 17 is important to briefly review the suitability of using a comparative case study design for large-scale projects. According to Michael Collier, Director of Research at Florida International University s Latin American and Caribbean Center, the purpose for conducting comparative studies is to identify variance among the measured attributes. 39 Measuring variance allows the observer to identify diversity and determine how different attributes may result in the same outcome. He says, Often qualitative and quantitative analysis tools are used incorrectly in comparative studies the goal or strategy of comparative research is to discover diversity among cases. Quantitative methods assume that all causal factors (independent variables) work the same against the outcome factor (dependent variable) being explained. In comparative analysis, it is assumed that there is more than one causal path to the same outcome. 40 Collier points out that comparative research identifies diversity and only can apply to a moderate number of case studies, say 50 or so. 41 For studies with more than 50 cases, the researcher must move away from the comparative case study format and use statistical methods. 42 One project that uses the comparative case study design to systematically catalog national intelligence communities is Brassey s International Intelligence Yearbook by Robert Henderson. Henderson attempts to create a comprehensive list of intelligence agencies in 50 countries. 43 background reference guide. 44 Brassey s Yearbook is intended to provide such a For the purposes of comparison, this reference guide 39 Michael Collier, A Pragmatic Approach to Developing Intelligence Analysts, Defense Intelligence Journal, 14, no. 2 (2005), Ibid, Ibid. 42 Ibid. 43 Robert Henderson, Brassey s International Intelligence Yearbook: 2003 Edition (Washington DC: Brassey s Inc, 2003). 44 Ibid, x

27 18 structures its information into two broad categories, country briefings and countries studies. For each country Henderson compares the following attributes: 45 System of Government National Intelligence Community National Security Legislation Intelligence Oversight International Intelligence Relationships Recent activities Both categories, country studies and country briefings, contain a section of each listed attribute. However, each country lacks completeness and uniformity in its data. For example, Henderson s Costa Rican country study says of intelligence oversight, Reportedly, there is a Legislative Assembly Committee with responsibility for legislative review of the security and police forces. 46 This brief description includes only the name of the legislative body and their technical area of oversight. Henderson does not explain the historical context of the country s intelligence oversight, officials charged with overseeing intelligence agencies, or the source for this information. This is a marked difference from the next country study, Estonia. For intelligence oversight, Henderson includes the name of the oversight authorities, the historical run-up to the current system, notable oversight figures, and the source of the information. 47 While Henderson lacks uniformity in completeness of each predetermined attribute, he effectively creates a reference guide for future studies. His goal is not to create a methodologically correct book of case studies. Henderson wants to provide future researchers with a starting point. As a result, many of his country studies contain relevant information pertinent to this thesis. 45 Ibid, xi 46 Robert Henderson, Brassey s International Intelligence Yearbook: 2003 Edition (Washington DC: Brassey s Inc, 2003), Ibid,

28 19 Another study attempting to catalog the world s intelligence agencies is a subset of the Intelligence Resource Program (IRP), an ongoing project by the Federation of American Scientists (FAS). This section of the IRP is dedicated toward finding and classifying any available information on any intelligence agency. 48 Each country has information discussing their national intelligence agencies. The individual listings generally have two sections. The first section contains documents specifically about the intelligence agencies. For example, the IRP lists India s three different ministries with intelligence agencies. 49 The second section contains information about sources and background areas for future research. Looking again at the entry for India, the sourcing section has two entries; the first is a study by Ronald Kostoff of the US Department of the Navy, which reviews Indian defense research literature. 50 The second source links to Bharat-Rakshak, a news-like consortium with different Indian military websites available. 51 Each source provides a valuable starting place for future research. The IRP s website on the world s different intelligence agencies is a repository of information with limited analysis. It is best called a research library, not a study. Barring countries with well-known intelligence agencies, each country entry links to either a document on FAS s website or to another external source. Like Henderson, the FAS s IRP provides resources, much like a specialized library or database. These sources amount to correlated data and not congregate findings or assessments. Previous qualitative methods used to describe the world s intelligence 48 To see the IRP s list of countries with complied information on their intelligence agencies, see John Pike, World Intelligence and Security Agencies, 49 John Pike, India Intelligence and Security Agencies, 50 Ibid. To read Kostoff s study, see Ronald N. Kostoff, et al., Assessment of India's Research Literature, 51 Ibid. To view Bharat-Rakshak, see Bharat-Rakshak,

29 20 systems are relevant when looking at individual countries, and understanding other methods to achieve civilian control over intelligence services is important. However, the lack of quantitative studies describing intelligence communities provides an excellent opportunity for advancement, particularly in testing Loch Johnson s correlation between intelligence activity and national wealth. This study s specific goal is to quantitatively determine the approximate size of the world s intelligence industry, although it expects to identify Lock s relationship. To that end, the researcher expects the aggregated amount spent on intelligence to near 100 billion United States Dollars (USD), and the total number of people working within the worldwide community to be about 500,000.

30 21 METHODOLOGY This study uses a quantitative descriptive research design because it allows for the classification of a sample population s characteristics in a systematic way. 52 For each country, the study measures the following interval data intelligence spending, personnel, and Gross Domestic Product (GDP). This study uses the definition of GDP given by the Bureau of Economic Analysis (BEA). The researcher collected intelligence spending and personnel information on individual countries using open sources, primarily from the internet. The data also comes from traditional academic sources, such as books, journals, and conference papers. However, not all budgetary and personnel information is readily available for every country. The study does estimate some of the intelligence spending and personnel data. The following chapter explains the process used to identify and estimate the different spending and personnel numbers of the world s intelligence industry. This chapter also explains how the researcher collated the intelligence spending of individual nations into standardized units, such as dollars valued at a certain year. Quantifying the set of data allowed for cross-country comparisons. However, problems arose when unifying the datasets and this affected the standardizing process. The last section describes the methods used to resolve these classification problems, specifically 52 This concept and other methodological approaches are discussed in Ronald Hunter and Mark Dantzker, Research Methods for Criminology and Criminal Justice: A Primer, 2 nd ed. (Boston: Jones & Bartlett, 2005), , sign&source=bl&ots=csla94hg0k&sig=- 8ayiRuBBsQ7dp0OICv7dMOGjD8&hl=en&ei=M0whSsrLG4aHtgeK_7jCBg&sa=X&oi=book_result&ct =result&resnum=2#ppp1,m1.

31 22 how this study dealt with the definitional inconsistencies of different personnel types, such as full-time, part-time, and contacted employees. Data Collection According to the Congressional Research Service, open source information comes from newspapers, journals, radio, television, and the internet. 53 Collecting information on intelligence spending and employment came primarily from sources on the internet. The data also came from other sources, such as scholarly journals, trade publications, and congressional research documents. This thesis limits the scope of collection to the 195 sovereign nation-states recognized by the United States State Department with the exception of the Holy See (Vatican City). These states form the basis of the data. The Vatican is not included because there are no GDP estimates to indicate its national wealth. Attempting to measure this indicator would likely present a problem, as most of the Vatican s income comes from outside its territorial boundaries. The Vatican s external assets and economic activity cannot be included in a GDP estimate under the BEA s definition of GDP, which it says is the value of final goods and services produced in [a country] in a given period of time. 54 With the exception of minor goods, such as tourist mementos and museum fees, the primary sources of income for Vatican City come from external sources. Therefore, its GDP estimate is tricky at best to determine. 53 Congressional Research Service, Open Source Intelligence (OSINT): Issues for Congress, US Library of Congress, Order Code RL34270, December 5, 2007, 54 Bureau of Economic Analysis, Measuring the Economy: A Primer on GDP and the National Income and Product Accounts, US Department of Commerce, September 2007, 2,

32 23 The list of 195 countries does not include dependencies or other areas that are not independent nations. Excluding these areas is consistent with the US State Department s definitions. 55 The United Nations also does not consider these territories as independent nations, and they are not recognized as Member States. 56 The agencies listed within each country are intelligence agencies. To the best of his ability, the researcher excluded government agencies with characteristics unique to law enforcement. In some cases, the distinction between intelligence and law enforcement is blurred. One example is the treatment of financial intelligence units (FIU) as members of an intelligence community. While some FIUs act as members of a nation s intelligence community, others do not. The researcher addressed this issue by generally excluding agencies with mandates requiring them to enforce financial regulations, compliance matters, and tax evasion when it relates to money laundering. In other cases, there is no distinction between intelligence and law enforcement agencies. The researcher used the best available information to establish if such an agency was consistent with the conceptual framework as explained in Chapter 2. Collection from Internet Sources The researcher used three different methods to collect relevant information from the internet. The first method consisted of keyword and phrase searches using terms most likely to generate results of an individual country s intelligence spending and personnel. Some keywords and phrases resulted in the desired information, but not all. 55 See United States State Department, Independent States in the World, 56 To see the list of Member-States of the United Nations, see United Nations, Member States of the United Nations, [accessed June 1, 2009].

33 24 Most of the search results gave supplementary information, such as oversight committees or annual reports about the intelligence community of a country. The most useful results were noted for future use. After using this initial search criterion, the researcher adjusted the terms to specify the intelligence agencies. Adjusting the search criterion increased the precision of the results. The process of searching initial keywords and phrases, then refining, is a matter of trial and error. After finding the relevant information, the researcher recorded the relevant data and year of publication. This method was applied to every country. In the second search method, the researcher utilized online journals and websites with dedicated sections on intelligence. Journals like the International Journal of Intelligence and Counterintelligence, the Defense Intelligence Journal, and the Intelligence and National Security Journal, provided some keywords and phrases for future use. While some of the journals are available print, many more are available on the internet. Additionally, their online versions tended to be more suitable, as they are easier to conduct keyword searches. The researcher searched these journals in a very systematic manner, where the most recent editions articles were examined for relevant information. The only articles searched had descriptions about intelligence agencies or communities however, the journal article titles provided most of the information necessary to determine if they contained any relevant information. After recording the relevant data and citation from the journal publication, the researcher continued on to the previous journal edition, searching through it for relevant information. Each scholarly journal received this process.

34 25 Other online publishers that consistently report, or have dedicated sections, on intelligence agencies received the same systematic search approach. Some of these organizations include the Federation of American Scientists (FAS), Jane's Sentinel Country Risk Assessments Library, the Geneva Center for the Democratic Control of Armed Forces (DCAF), and GlobalSecurity.org. The researcher also applied the systematic search approach to these sources, although the process slightly differed. From a researcher s standpoint, the primary difference between these sources and scholarly journals is how they categorize their information. The scholarly journals generally organize their content around date, whereas these online publishers organize their content around national lines. This required a slight change in systematically searching for data. Instead of searching these online sources based on publication date, the researcher searched for data along national lines, systematically going through each publisher s list of countries, one at a time. Government websites proved to be another useful source for information. As previously discussed, some countries intelligence agencies publish a regular report of spending, while in other countries the governments require the agencies to publish general budgetary reports every so often. An example of a country that requires annual reporting is New Zealand. Section 34 and 70I of the 1989 New Zealand Public Finance Act requires the New Zealand Security Intelligence Service to undergo an annual audit by the internal Auditor-General. 57 Comparatively, the United States Constitution requires a regular Statement and Account of the Receipts and Expenditure of all public Money shall 57 New Zealand Security Intelligence Service, Financial Reporting, House of Representatives, Home > Annual Reports > 2006 > Financial Reporting,