DEFENCE SPENDING AND ECONOMIC GROWTH, 1970-2015: Empirical Evidence
- Ahmed Yusuf Taheer
- Abraham A. Alexander
- Yakubu Joy Asmau
- ( paper pages. 1 - 16 )
Abstract
This paper investigates the relationship between defence expenditure and economicgrowth in Nigeria 1970-2015 proxied by gross domestic product (GDP), social sectorexpenditure (SSE) and gross capital formation (GCF). Defence expenditure being amajor concern to any economy world has become a major tool in accessing the levelof economic growth, particularly in Nigeria where defence expenditure is higher thanthat of education and capital expenditure. The result indicated that the coefficient ofinteraction between social sector expenditures (SSE) and defence expenditure in thelong run is negative and significant, given the coefficient of about -0.09 withcorresponding p-values of 0.0372, which is less than 5% critical value. Theimplication of this is that the interaction of DEXP with SSE produced significanteffect on the national output, GDP. It crowded out investment in the social sector,such as education and healthcare in the long run. In this case, the price of insecurityis the dearth of infrastructure. Based on the findings, the paper recommendedgovernment should reduce expenditures on the military to discourage the crowdingout of funds for local investments.
Citation
Ahmed Yusuf Taheer, Abraham A. Alexander, Yakubu Joy Asmau.
2018.
"DEFENCE SPENDING AND ECONOMIC GROWTH, 1970-2015: Empirical Evidence"
The Nigerian Journal of Economic and Social Studies,
60 (1): 1 - 16.
JEL Classification
E62, H56, O47
