Defence Expenditure and Economic Growth in South Africa

A Roux

Studies in Economics and Econometrics, 1996, vol. 20, issue 1, 19-34

Abstract: In assessing the impact of military expenditure on South Africa’s growth performance between 1960 and 1990, this paper first explores the plausible interrelationship between the two variables, based on theoretical and empirical evidence. The nature and magnitude of the influence of military expenditure are then estimated with the aid of appropriate regression techniques.Although some of the statistical tests are somewhat unconvincing, it would seem fair to conclude that the military burden had a negative effect on economic growth between 1960 and 1990. The econometric results also suggest that military spending has not influenced - positively or negatively - the gross domestic savings rate, and that the current account has reacted negatively to military expenditure. Finally, during the period under review military spending decisions did not take cognisance of prevailing economic considerations.

Date: 1996
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DOI: 10.1080/03796205.1996.12129087

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