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Non-linear effect of military spending on economic growth in Africa: A comparative study between stable and unstable countries

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  • Aurelien, Njamen Kengdo Arsene
  • Nchofoung, Tii Njivukuh
  • Marcel, Takoulac Kamta
  • Jean-Claude, Kouladoum

Abstract

The objective of this paper is to make a comparative analysis of the non-linear effect of military spending on economic growth in stable and unstable African countries. The methodology used refers, on one hand, to the threshold panel technique, and on the other hand to the Generalised Method of Moments (GMM) using data from 1990 to 2017. The results reveal that military spending negatively and significantly affects economic growth in both groups of countries. The positive sign associated with the variable “military spending squared†confirms the existence of a non-linear relationship with military spending thresholds, respectively, of about $ 2.13 billion and $ 3.63 billion for the stable and unstable group of countries, ceteris paribus. In terms of recommendations, (i) States must engage in the resolution of internal and cross-border conflicts that fuel increase military expenditures; (ii) guarantee the expression of civil liberties that condition the exercise of economic activities

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  • Aurelien, Njamen Kengdo Arsene & Nchofoung, Tii Njivukuh & Marcel, Takoulac Kamta & Jean-Claude, Kouladoum, 2019. "Non-linear effect of military spending on economic growth in Africa: A comparative study between stable and unstable countries," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 9(2), pages 195-215.
    • Handle: RePEc:gok:ijdcv1:v:9:y:2019:i:2:p:195-215
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    Cited by:

    1. Nchofoung, Tii N., 2022. "Trade shocks and labour market resilience in Sub-Saharan Africa: Does the franc zone response differently?," International Economics, Elsevier, vol. 169(C), pages 161-174.
    2. Simplice A. Asongu & Nicholas M. Odhiambo, 2021. "The role of inclusive education in governance for inclusive economic participation: gender evidence from sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 21/097, African Governance and Development Institute..

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    More about this item

    Keywords

    Military Spending; Economic Growth; Threshold Panel; Generalised Moment Method.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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