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Military Expenditure and Economic Growth in the Sahel Countries: A Return to a Controversial Relationship

Par : Contributeur(s) : Type de matériel : TexteTexteLangue : français Détails de publication : 2024. Sujet(s) : Ressources en ligne : Abrégé : This article analyses the effect of military spending on economic growth in Sahel countries over the period 1995–2020. Two econometric estimation approaches are used: a linear model and a dynamic panel approach with an endogenous threshold. The results reveal a positive and significant effect of defence and security budget allocations on economic growth in the region, and the analysis highlights the existence of a threshold for military spending, estimated at 3.09% of GDP in the region. Below this threshold, military spending has a positive effect on economic growth, while beyond this threshold, the effect remains negative. Furthermore, the study identifies two main channels through which military spending affects economic growth: the improvement of human capital and political stability. To take advantage of defence and security spending, the study recommends capping these expenses at the threshold of 3.09% of GDP in Sahel countries. JEL classification codes: C23, E60, H50, O43
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This article analyses the effect of military spending on economic growth in Sahel countries over the period 1995–2020. Two econometric estimation approaches are used: a linear model and a dynamic panel approach with an endogenous threshold. The results reveal a positive and significant effect of defence and security budget allocations on economic growth in the region, and the analysis highlights the existence of a threshold for military spending, estimated at 3.09% of GDP in the region. Below this threshold, military spending has a positive effect on economic growth, while beyond this threshold, the effect remains negative. Furthermore, the study identifies two main channels through which military spending affects economic growth: the improvement of human capital and political stability. To take advantage of defence and security spending, the study recommends capping these expenses at the threshold of 3.09% of GDP in Sahel countries. JEL classification codes: C23, E60, H50, O43

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