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The Role of Institutional Quality in Military Spending and Unemployment Nexus in Nigeria

Author

Listed:
  • Raifu Isiaka Akande
  • Obijole Emmanuel Olubowale

    (Department of Economics, Faculty of Economics and Management Sciences, University of Ibadan, Ibadan, Oyo State, Nigeria)

  • Nnadozie Obianuju Ogochukwu

    (Department of Economics, University of Benin, Benin City, Edo, Nigeria)

Abstract

This paper adopts the Autoregressive Distributed Lag (ARDL) estimation method to investigate the moderating role of institutional quality in military spending and the unemployment rate nexus in Nigeria for the period from 1984 to 2019. It also tests the direction of causality between military spending and unemployment using the Toda-Yamamoto Granger non-causality method. The causality results show that the direction of causality depends on the measure of military spending used. The main results indicate that military spending only reduces unemployment in the short run and worsens unemployment in the long run. The results further show that institutional quality does not play any significant moderating role in the relationship between military spending and unemployment. Based on our findings, we advocate that the government should allocate its expenditure properly, especially to the most productive sectors of the economy instead of increasing military spending that has no long-run effect on unemployment. Besides, the government needs to strengthen the institutional apparatuses in the country.

Suggested Citation

  • Raifu Isiaka Akande & Obijole Emmanuel Olubowale & Nnadozie Obianuju Ogochukwu, 2022. "The Role of Institutional Quality in Military Spending and Unemployment Nexus in Nigeria," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(2), pages 155-194, May.
    • Handle: RePEc:bpj:pepspp:v:28:y:2022:i:2:p:155-194:n:1
    DOI: 10.1515/peps-2022-0006
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    Citations

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    Cited by:

    1. Isiaka Akande Raifu & Alarudeen Aminu, 2023. "The effect of military spending on economic growth in MENA: evidence from method of moments quantile regression," Future Business Journal, Springer, vol. 9(1), pages 1-21, December.

    More about this item

    Keywords

    military spending; unemployment rate; institutional quality;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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