IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/103599.html
   My bibliography  Save this paper

African Junta and Defense Spending: A Capture Effect or Self-Preservation?

Author

Listed:
  • Kodila-Tedika, Oasis
  • Khalifa, Sherif

Abstract

This paper examines the effect of the presence of a military ruler on military expenditure using a panel of sub-Saharan Africa countries. The paper also explores whether the relationship reflects a capture effect, is an outcome of the confrontational climate of the cold war, or is an effort by military rulers for self-preservation. The Pooled OLS and fixed effects OLS estimations show that the presence of a military ruler has a statistically significant negative effect on military spending as a percentage of GDP. The coefficients are also not significantly different before or after the end of the cold war era. This implies that the negative relationship is driven by an effort by military rulers to preempt the ability of their peers to overthrow them from power. We also attempt to deal with potential endogeneity, and consider the possibility of persistence in military spending. The paper uses the Arellano and Bond (1991) estimation technique that shows a negative but insignificant effect of the presence of a military ruler on military expenditure, while military spending shows a high degree of persistence.

Suggested Citation

  • Kodila-Tedika, Oasis & Khalifa, Sherif, 2020. "African Junta and Defense Spending: A Capture Effect or Self-Preservation?," MPRA Paper 103599, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:103599
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/103599/1/MPRA_paper_103599.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2010. "A Theory of Military Dictatorships," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 1-42, January.
    2. Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-372, January.
    3. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    4. Jennifer Brauner, 2015. "Military spending and democracy," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(4), pages 409-423, August.
    5. Deger, Saadet & Sen, Somnath, 1983. "Military expenditure, spin-off and economic development," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 67-83.
    6. Ortiz, Cristian & Alvarado, Rafael & Salinas, Aldo, 2019. "The effect of military spending on output: New evidence at the global and country group levels using panel data cointegration techniques," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 402-414.
    7. J. Paul Dunne & Ron P. Smith, 2020. "Military Expenditure, Investment and Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(6), pages 601-614, August.
    8. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2015. "Military careers of politicians matter for national security policy," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 142-156.
    9. Giorgio d’Agostino & J. Paul Dunne & Luca Pieroni, 2017. "Does Military Spending Matter for Long-run Growth?," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(4), pages 429-436, July.
    10. E. Desli & A. Gkoulgkoutsika & C. Katrakilidis, 2017. "Investigating the Dynamic Interaction between Military Spending and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 511-526, August.
    11. Julide Yildirim & Selami Sezgin, 2005. "Democracy and Military Expenditure: A Cross-Country Evidence," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 12(1), pages 93-100, July.
    12. Gabriel Leon, 2014. "Loyalty for sale? Military spending and coups d’etat," Public Choice, Springer, vol. 159(3), pages 363-383, June.
    13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    14. Timothy Besley & James A. Robinson, 2010. "Quis Custodiet Ipsos Custodes? Civilian Control Over the Military," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 655-663, 04-05.
    15. Smith, Ronald P., 1980. "Military expenditure and investment in OECD countries, 1954-1973," Journal of Comparative Economics, Elsevier, vol. 4(1), pages 19-32, March.
    16. Anca M. Cotet & Kevin K. Tsui, 2013. "Oil and Conflict: What Does the Cross Country Evidence Really Show?," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 49-80, January.
    17. Saadet Deger & Ron Smith, 1983. "Military Expenditure and Growth in Less Developed Countries," Journal of Conflict Resolution, Peace Science Society (International), vol. 27(2), pages 335-353, June.
    18. Töngür, Ünal & Hsu, Sara & Elveren, Adem Yavuz, 2015. "Military expenditures and political regimes: Evidence from global data, 1963–2000," Economic Modelling, Elsevier, vol. 44(C), pages 68-79.
    19. Tsai-Yuan Huang & Po-Chin Wu & Shiao-Yen Liu, 2017. "Defense–Growth Causality: Considerations of Regime-Switching and Time- and Country-Varying Effects," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(5), pages 568-584, September.
    20. Vincenzo Bove & Claudio Deiana & Roberto Nistic�, 2018. "Global Arms Trade and Oil Dependence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(2), pages 272-299.
    21. Hewitt, Daniel, 1992. "Military Expenditures Worldwide: Determinants and Trends, 1972–1988," Journal of Public Policy, Cambridge University Press, vol. 12(2), pages 105-152, April.
    22. Vincenzo Bove & Jennifer Brauner, 2016. "The demand for military expenditure in authoritarian regimes," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 609-625, September.
    23. Albalate, Daniel & Bel, Germà & Elias, Ferran, 2012. "Institutional determinants of military spending," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 279-290.
    24. Deger, Saadet, 1986. "Economic Development and Defense Expenditure," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 179-196, October.
    25. Mintz, Alex & Huang, Chi, 1990. "Defense Expenditures, Economic Growth, and the “Peace Dividendâ€," American Political Science Review, Cambridge University Press, vol. 84(4), pages 1283-1293, December.
    26. Faini, Riccardo & Annez, Patricia & Taylor, Lance, 1984. "Defense Spending, Economic Structure, and Growth: Evidence among Countries and Over Time," Economic Development and Cultural Change, University of Chicago Press, vol. 32(3), pages 487-498, April.
    27. Christian Bjørnskov & Martin Rode, 2020. "Regime types and regime change: A new dataset on democracy, coups, and political institutions," The Review of International Organizations, Springer, vol. 15(2), pages 531-551, April.
    28. Chang, Hsin-Chen & Huang, Bwo-Nung & Yang, Chin Wei, 2011. "Military expenditure and economic growth across different groups: A dynamic panel Granger-causality approach," Economic Modelling, Elsevier, vol. 28(6), pages 2416-2423.
    29. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    30. Lim, David, 1983. "Another Look at Growth and Defense in Less Developed Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 31(2), pages 377-384, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xinyi Wang & Na Hou & Bo Chen, 2023. "Democracy, military expenditure and economic growth: A heterogeneous perspective," Defence and Peace Economics, Taylor & Francis Journals, vol. 34(8), pages 1039-1070, November.
    2. Sefa Awaworyi Churchill & Siew Ling Yew, 2018. "The effect of military expenditure on growth: an empirical synthesis," Empirical Economics, Springer, vol. 55(3), pages 1357-1387, November.
    3. E. Desli & A. Gkoulgkoutsika & C. Katrakilidis, 2017. "Investigating the Dynamic Interaction between Military Spending and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 511-526, August.
    4. E. Desli & A. Gkoulgkoutsika, 2021. "Military spending and economic growth: a panel data investigation," Economic Change and Restructuring, Springer, vol. 54(3), pages 781-806, August.
    5. Christos Kollias & Suzanna-Maria Paleologou, 2019. "Military spending, economic growth and investment: a disaggregated analysis by income group," Empirical Economics, Springer, vol. 56(3), pages 935-958, March.
    6. Na Hou & Bo Chen, 2013. "Military Expenditure And Economic Growth In Developing Countries: Evidence From System Gmm Estimates," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(3), pages 183-193, June.
    7. Vincenzo Bove & Jennifer Brauner, 2016. "The demand for military expenditure in authoritarian regimes," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 609-625, September.
    8. Alptekin, Aynur & Levine, Paul, 2012. "Military expenditure and economic growth: A meta-analysis," European Journal of Political Economy, Elsevier, vol. 28(4), pages 636-650.
    9. Abdur R. Chowdhury, 1991. "A Causal Analysis of Defense Spending and Economic Growth," Journal of Conflict Resolution, Peace Science Society (International), vol. 35(1), pages 80-97, March.
    10. Rafał Woźniak & Jacek Lewkowicz, 2023. "Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 28-46.
    11. Paula Gómez-Trueba Santamaría & Alfredo Arahuetes García & Tomás Curto González, 2021. "A tale of five stories: Defence spending and economic growth in NATO´s countries," PLOS ONE, Public Library of Science, vol. 16(1), pages 1-22, January.
    12. Chang, Hsin-Chen & Huang, Bwo-Nung & Yang, Chin Wei, 2011. "Military expenditure and economic growth across different groups: A dynamic panel Granger-causality approach," Economic Modelling, Elsevier, vol. 28(6), pages 2416-2423.
    13. Bove, Vincenzo & Nisticò, Roberto, 2014. "Military in politics and budgetary allocations," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1065-1078.
    14. Kyriakos Emmanouilidis & Christos Karpetis, 2020. "The Defense–Growth Nexus: A Review of Time Series Methods and Empirical Results," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(1), pages 86-104, January.
    15. Mehmet Akif Destek & Ilyas Okumus, 2016. "Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(2), pages 175-186.
    16. Shieh, Jhy-yuan & Lai, Ching-chong & Chang, Wen-ya, 2002. "The impact of military burden on long-run growth and welfare," Journal of Development Economics, Elsevier, vol. 68(2), pages 443-454, August.
    17. Saba Ismail, 2017. "Military Expenditure and Economic Growth in South Asian Countries: Empirical Evidences," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 318-325.
    18. Ortiz, Cristian & Alvarado, Rafael & Salinas, Aldo, 2019. "The effect of military spending on output: New evidence at the global and country group levels using panel data cointegration techniques," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 402-414.
    19. Vincenzo Bove & Roberto Nisticò, 2014. "Coups d’état and defense spending: a counterfactual analysis," Public Choice, Springer, vol. 161(3), pages 321-344, December.
    20. Shahbaz, Muhammad & Leitão, Nuno Carlos & Uddin, Gazi Salah & Arouri, Mohamed & Teulon, Frédéric, 2013. "Should Portuguese economy invest in defense spending? A revisit," Economic Modelling, Elsevier, vol. 35(C), pages 805-815.

    More about this item

    Keywords

    military rule; military spending;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:103599. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.