Does Military Spending Nonlinearly Affect Economic Growth in South Africa?. Issue 4 (7th June 2019)

• Record Type: Journal Article
• Authors: Phiri, Andrew
• Is Part Of: Defence and peace economics. Volume 30:Issue 4(2019)
• Page Start: 474
• Page End: 487
• Publication Date: 2019-06-07
• Subjects: Military expenditure -- non-military expenditure -- economic growth -- investment -- labour, exports -- South Africa -- sub-Saharan Africa -- developing country -- smooth transition regression (STR) model; C32 -- H56 -- O40; Military readiness -- Economic aspects -- Periodicals; Disarmament -- Economic aspects -- Periodicals; 338.47355
• DOI: 10.1080/10242694.2017.1361272
• Languages: English
• ISSNs: 1024-2694

Abstract

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.