Military Spending and Economic Growth in Sub Saharan Africa

The economic effects of military spending is an important issue for developing countries, particularly for regions such as Sub Saharan Africa (SSA), has been through considerable turmoil, with high levels of conflict in the region and generally poor economic performance. There has, however, been a limited amount of empirical work on the area, particularly work that takes into account the years following the Cold War. This paper provides an empirical analysis of the effect that military spending has had on the economies in the region. It provide a brief review of the empirical literature for developing countries, which suggests that there is little or no evidence for a positive effect on economic growth and that it is more likely to have a negative effect, or at best no significant impact at all. A growth model based on Dunne et al (2006), which includes military sending and overcomes some of the limitations of earlier models, is then estimated on a panel of countries using SIPRI, IFS and World Bank data for 1988-2006.s model. This finds unequivocal negative impacts of military spending on growth for SSA, consistent with the results for all countries and all non developed countries. Breaking down the sample into those involved in conflict and those not provides some further intriguing findings.