This paper presents a theory of insurgency-state strategic interaction based on the insurgency’s mode of survival. The theory postulates that, ceteris paribus, illegal resources discourage the insurgents from desiring to control the state and the state from regaining control of the insurgent territory, whereas legal lootable resources “force” the insurgency to embrace the suboptimal strategy of trying to topple the government, while causing the state to desire full control of the insurgent territory. Intensity, the number of combatant deaths over time, will be used to test the theory. Civil conflicts involving insurgencies that rely on illegal resources for most of their revenue should be of low intensity. The opposite should hold true for civil wars in which the insurgency’s livelihood is a legal lootable resource.

When and why do rebels hire private military actors? I argue that rebels are more likely to hire private military actors under the conditions of power asymmetry, rebel competition, the presence of lootable resources and when rebel groups have effective leadership and organizational structures. I test three hypotheses empirically using the PSED dataset which identifies that rebel hired private military actors account for nearly 10% of all PMSC/mercenary employers in Africa, Latin America, and Asia from 1990-2012. I find strong empirical support that power imbalances between rebel groups and government, and the presence of lootable resources increases the likelihood of employment. Counter to my expectations, I find that rebel competition reduces hiring. A qualitative analysis shows that rebel groups with parent organizations are more likely to hire private military actors.