Pro-government militias (PGMs) and private military and security companies (PMSCs) have recently received increasing scholarly attention. Studies looked at why and under which conditions governments make use of militias or private contractors both in war and peace times. However, little is known about if and how countries may strategically choose one option over the other, both simultaneously, or neither. We argue that PGMs and PMSCs ultimately serve the same purpose for a government: the improvement of military and security capacity. We further argue that governments choose their options according to primarily three factors: regime type, access to natural resources and, within the context of civil wars, rebel strength. We expect more democratic countries to prefer PMSCs over PGMs while the opposite is the case for more autocratic countries. Moreover, we expect regimes with natural resources to prefer PGMs over PMSCs. In the context of civil wars, countries challenged by relatively strong rebel groups are expected to choose PMSCs whereas countries confronted with weak rebel groups are likely to prefer PGMs. We test our expectations using data on pro-government militias, private military companies, and state security forces, and find evidence for our theoretical expectations. Our findings contribute to the literature on state repression and non-state actors.