Does Military Spending Nonlinearly Affect Economic Growth in South Africa?

Andrew Phiri

Defence and Peace Economics, 2019, vol. 30, issue 4, 474-487

Abstract: Using annual data collected from 1988 to 2015, this study provides evidence of a non-linear relationship between military spending, economic growth and other growth determinants for the South African economy. The empirical study is based on estimates of a logistic smooth transition regression (LSTR) model and our empirical results point to an inverted U-shaped relationship between military spending and economic growth for the data. Furthermore, our empirical results suggest that the current levels of military spending, as a component of total government expenditure, are too high in the South African economy and need to be transferred towards more productive non-military expenditure in order to improve the performance of economic growth and other growth determinants.

Date: 2019
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Working Paper: Does military spending nonlinearly affect economic growth in South Africa? (2016)
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DOI: 10.1080/10242694.2017.1361272

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