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

Njamen Kengdo Arsène Aurélien (), Tii Nchofoung (), Takoulac Kamta Marcel and Kouladoum Jean-Claude

International Journal of Development and Conflict, 2019, vol. 9, issue 2, 195-215

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

Keywords: Military Spending; Economic Growth; Threshold Panel; Generalised Moment Method. (search for similar items in EconPapers)
JEL-codes: C23 H56 O47 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:gok:ijdcv1:v:9:y:2019:i:2:p:195-215