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Determinants of Military Spending in Africa: Do Institutions Matter?

Author

Listed:
  • Njamen Kengdo Arsène Aurelien

    (Department of Economics Policy Analysis, Center of Studies and Research in Management and Economics (CERME), Faculty of Economics and Management, University of Dschang, Dschang, Cameroon)

  • Nchofoung Tii N.

    (Department of Economics Policy Analysis, Faculty of Economics and Management, University of Dschang, Dschang, Cameroon)

  • Kos A Mougnol Alice

    (Department of Economics Policy Analysis, Center of Studies and Research in Management and Economics (CERME), Faculty of Economics and Management, University of Dschang, Dschang, Cameroon)

Abstract

This paper focuses on the determinants of military spending in Africa by considering the role played by institutions. With data obtained between the years 1996–2019, the Driscoll and Kraay fixed effects, the Generalised Method of Moments (GMM), and the Bayesian Model Averaging (BMA) estimators are used. The findings suggest that government size, trade freedom, economic risk, and political risk decrease military spending, whereas government stability and military involvement in politics are found to raise it. Using alternative institutional variables, we find that corruption, government effectiveness, political stability, regulatory quality, the rule of law, and voice and accountability significantly diminish military spending in Africa. In addition, concerning the economic determinants, the results reveal that trade openness and total natural resource rents reduce military spending, while GDP per capita, inflation, and foreign debt stocks increase it. Looking at strategic determinants, arms imports, urban population, and ethnic tensions positively affect African military expenditures. Robustness checks show that these results change once regional specificities are considered. The study concludes that institutional factors could be an engine for evolution in Africa’s military spending.

Suggested Citation

  • Njamen Kengdo Arsène Aurelien & Nchofoung Tii N. & Kos A Mougnol Alice, 2023. "Determinants of Military Spending in Africa: Do Institutions Matter?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 29(4), pages 401-440, December.
    • Handle: RePEc:bpj:pepspp:v:29:y:2023:i:4:p:401-440:n:6
    DOI: 10.1515/peps-2023-0014
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    References listed on IDEAS

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    1. Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
    2. Leah M. Cook & Alicia H. Munnell, 1990. "How does public infrastructure affect regional economic performance?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 11-33.
    3. Younes Zouhar & Jon Jellema & Nora Lustig & Mohamed Trabelsi, 2021. "Public Expenditure and Inclusive Growth - A Survey," Commitment to Equity (CEQ) Working Paper Series 109, Tulane University, Department of Economics.
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    Cited by:

    1. Ally, Zawadi & Kingu, John, 2024. "The Dynamics of Political Stability and Military Expenditure on Economic Growth: Insights from Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 12(3), September.

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    Keywords

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    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
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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