Defense Expenditure and Economic Growth in Nigeria
DOI:
https://doi.org/10.61143/umyu-jafr.4(2)2022.006Keywords:
Military Expenditure, Defense Expenditure, Security, Economic Growth, ARDLAbstract
This paper examined the impact of military expenditure on economic growth in Nigeria. Real Gross Domestic Product (RGDP) which was proxy for economic growth served as the dependent variable while the independent variables are Defense Expenditure (DEXP), Internal Security Expenditure (INTSEXP), Nigerian Terrorism Index (NTI) and Index of Political Stability (IPS). The study made use of ARDL bound test to determine existence of long run relationship amongst variables, after which it adopt the long run ARDL model to determine the impact of the independent variables on the dependent variable. The study therefore found that defense expenditure, internal security expenditure and index of political stability all had positive and significant impact on economic growth in the long run while Nigerian terrorism index had a positive but insignificant impact on economic growth within the study period. Therefore, the study recommends that the government should increase expenditure on defense and internal security, so as to bring down the level of terrorist activities and in turn ensure a stable political climate in the country. If this can be achieved, economic growth no doubt will be stimulated in the Nigerian environment.
Metrics
References
Akpa, P. (1997). Force Structure and Budgeting System for Defence: A proposal for the fourth Republic. Being a Project submitted at the National War College, Course 5, 1996/97 Abuja, Nigeria unpublished, June, pp. 25 & 42, in Anyanwu, S; Egwaikhide, C. and Aiyedogbon J, eds,
Aizenman, J., & Reuven G. (2003). Military expenditure, threats and growth, FRBSF working paper, 2003-08 https://doi.org/10.3386/w9618
Amana, S. A., Aigbedion I. M., & Zubair A. Z. (2020). Impact of Government Security Expenditure on Economic Growth in Nigeria, International Journal of Innovative Research in Social Sciences and Strategic Management Techniques, Volume 7, Number 1, PP 23 - 37 https://doi.org/10.48028/iiprds/ijirsssmt.v7.i1.16
Ayange, A., Udo E., Abner S., Ishaku P., & Ndubuaku V. (2020). Security Expenditure On Economic Growth In Nigeria, Humanities & Social Sciences Reviews, Vol 8, No 3, 2020, pp 553-561 https://doi.org/10.18510/hssr.2020.8360
Benoit, E., (1978). Growth and defense in developing countries. Economic development and cultural change, 26(2), pp.271-280. https://doi.org/10.1086/451015
Biswas, R. & Ram R. (1986). Military Expenditure and Economic Growth in LDC: An Augmented Model and Further Evidence. Economic Development and Cultural Change 34(2) 361-37. https://doi.org/10.1086/451533
Carnahan, M., Durch, W., & Gilmore, S., (2006). Economic Impact of Peacekeeping. Final report of the discussion paper of the United Nations Peacekeeping.
Collier, P., (2006). War and military expenditure in developing countries and their consequences for development. The Economics of Peace and Security Journal, 1(1), pp. 34-40. https://doi.org/10.15355/epsj.1.1.10
D'Agostino, G., Dunne, J.P. & Pieroni, L., (2017). Does military spending matter for long-run growth?. Defense and Peace Economics, 28(4), pp.429-436. https://doi.org/10.1080/10242694.2017.1324723
Dakurah, H; S. Davies & R. Sampath (2001). Defence Spending and Economic Growth in Developing Countries: A Causality Analysis, Journal of Policy Modelling 23 (6) 651-658. https://doi.org/10.1016/S0161-8938(01)00079-5
Danek, J., (2013). The role of demilitarization in promoting democracy and prosperity in Africa, in Brauer, J and Dunne, J, eds, Arming the south, Palgrave, London: 15-33.
Deger, S. & Sen, S., (1995). Military expenditure and developing countries. Handbook of defense economics, 1, pp.275-307. https://doi.org/10.1016/S1574-0013(05)80013-4
Deger, S., & Smith, R., (1986). Military Expenditures and Growth in Less Developed Countries. Journal of Conflict Resolution, 27(1), pp. 335-353. https://doi.org/10.1177/0022002783027002006
Dunne, J., and Uye, M., (2010). Defence spending and development. Department of Economics, British University in Egypt and University of the West of England. A paper is based on work undertaken for Oxfam.
Dunne, J.P., Smith, R.P. & Willenbockel, D., (2004). Models of military expenditure and growth: A critical review. Defense and peace economics, 16(6), pp.449-461 https://doi.org/10.1080/10242690500167791
Enimola, S.,(2008). Defense Expenditure and Economic Growth: The Nigeria Experience 1977-2006. Unpublished MSc thesis at Department of Economics, Adekunle Ajasin University P.M.B 001, Akungba Akoko.
Enimola, S.S. & Akoko, A., (2011). Defense expenditure and economic growth: The Nigerian Experience: 1977-2006. Botswana Journal of Economics, 8(12), pp.26-44.
Ferda, H. (2004). Defense Spending and Economic Growth in Turkey: An Empirical Application of New Macroeconomic Theory. Review of Middle East Economic and Finance vol 2, no3, 193-206. https://doi.org/10.2202/1475-3693.1028
Galvin, H. (2003). The Impact of Defense Spending on Economic Growth on Developing Countries: A Cross Section Study, Defense and Peace Economic 14(1) 51-59. https://doi.org/10.1080/10242690302932
Gujarati, D. N. (2003). Basic Econometrics, 4th edition, New York: McGraw-Hill Higher Education. New York, USA.
Harris, G., (2004). Military expenditure in Sub-Saharan Africa: Why guns cost more than butter. FMF Monograph No. 39, first published in November 2004 by The Free Market Foundation.
Jeffery, K., & Edward K. (2008). Bringing the Military Back in Military Expenditure and Economic Growth 1990-2003. Journal of World system Research, Vol xiv(2), 142-172. https://doi.org/10.5195/jwsr.2008.342
Khalid, M.A. & Mustapha, A.B., (2014). Long-run relationships and causality tests between military expenditure and economic growth in India. The Economics and Finance Letters, 1(6), pp.49-58. https://doi.org/10.18488/journal.29/2014.1.4/29.4.49.58
Kalyoncu, H., and Yucel F. (2005). An Analytical Approach to Defence Expenditure and Economic Growth: The Case of Turkey and Greece. MPRA Paper no 4262.
Mints, B. U. and Stevenson T. (1995). Public education and defence spending in Nigeria: Implications for economic growth, Journal of Educational and Social Research. 2 (1), 1-12
Odusola, F.A. (1990). Military Expenditure and Economic Growth in Nigeria. Nigeria Journal of Economic and Social Studies 38 (1).
Olofin, O. (2012). Defense Spending and Poverty Reduction in Nigeria. American Journal of Economics,2012, 2(6): pp. 122-127. https://doi.org/10.5923/j.economics.20120206.05
Oriavwote, E. V. & Eshenake, S. J. (2013). A vector error correction modeling of security spending and economic growth in Nigeria, Accounting and Finance Research. 2 (2). https://doi.org/10.5430/afr.v2n2p59
Oshio, E. (2009). The Challenge of National Security and Development, Being a Paper Delivered at the Delta State Christian Professional League Seminar on Crisis Management and Nation Building at Grand Hotel, Asaba, on Thursday, 19th November
Otto, G. & Ukpere, W. I. (2012). National security and development in Nigeria, African Journalof Business Management. 6 (23), 6765-6770 https://doi.org/10.5897/AJBM12.155
Smaldone, W. (2005). Insecurity and investment: A Focus on air transport investment in Nigeria, Journal of Economic Development. 29 (11), 942 - 969.
Tiwari, A. & Shahbaz, Y. (2011). Regression analysis of health and defense expenditure on economic growth in Nigeria, International Journal of Peace and Conflict Studies (IJPCS), 4(2):53-64
Wagner, A. (1958). Finanzwissenschaft (3ed) partly reprinted in R.A Musgrave and A.T peacock (ed) the classics in the theory of public finance, Macmillan, London 1958.
Wilkins, J., (2004). Military expenditure and economic growth in Middle Eastern countries: A dynamic panel data analysis, Defence and Peace Economics, 16 (4), 283-29. https://doi.org/10.1080/10242690500114751
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 UMYU Journal of Accounting and Finance Research
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
