Does Internal Security Expenditure Impact on Economic Growth in Nigeria?
Keywords:
economic growth; government expenditure; national security; time series modelsAbstract
Any resource channeled into security has a trade-off effect, as it denies other sectors of the economy the needed resources that could be employed to enhance economic growth and welfare of the citizenry. This study examined the possible impacts of internal security expenditure on economic growth in Nigeria. Employing Autoregressive Distributed Lag (ARDL) estimating technique, the study estimated both the short-run and the long-run interactions between the chosen variables. The estimated result found internal security to be positively and significantly related to economic growth in the short-run but exhibits a negative and significant relationship with economic growth in the long-run. The result also revealed a negative and significant relationship between foreign direct investment and economic growth. Finally, the test for structural breaks found evidence for five breakpoints which interestingly corresponded with the periods of some structural and government policy changes in Nigeria. It is therefore recommended that resources to be channeled on security should be considered cautiously as not to adversely affect economic growth. Secondly, government should employ robust policies that would encourage foreign investments into the economy.
References
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Expenditure and Foreign Direct Investment in Nigeria. IOSR Journal of Business and Management (IOSR-JBM). Vol. 18, Issue 11, Pp 83-89.
Agu, O. C. and Nyatanga, P. (2020).An Investigation into the Crude Oil Price Pass-Through to
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and Entrepreneurship (CSRE): Antidotes to Poverty, Insecurity and Underdevelopment in
Akhemonkhan, I. A., Raimi, L. & Ogunjirin, O. D. (2012). Corporate Social Responsibility and
Entrepreneurship (CSRE): Antidotes to Poverty, Insecurity and Underdevelopment in Nigeria. Presented at the 6th International Conference held in Universiti de Lome, Togo from November 1-2
Aminu, M. U. & Abu Bakar, A. S. (2016). The Interactional Impact of Defense Expenditure
and Arms Importation on Economic Growth in Nigeria: An Autoregressive Approach. International Journal of Economics and Financial Issues. Vol. 6(2), pp 538-543.
Augier, M., McNab, R., Guo, J. & Karber, P. (2017). Defense spending and economic growth:
Evidence from China, 1952–2012. Defence and Peace Economics. Vol. 28:1, pp 65-90.
Bai, J., & Perron, P. (2003). Computation and analysis of multiple structural change
models. Journal of applied econometrics. Vol 18(1), pp 1-22.
Bandyopadhyay, S., Sandler, T., & Younas, J. (2011). Foreign Direct Investment, Aid, and
Terrorism: An Analysis of Developing Countries. Federal Reserve Bank of St. Louis Working Papers
Bredino, S., Fiderikumo, P. and Adesuji, A. (2018). Impacts of Capital Flight on Economic
Growth in Nigeria: An Economic Approach. Journal of Business and Economic Development. Vol 3(1), pp 22-29.
Connolly, M. & Li, C. (2016). Government Spending and Economic Growth in the OECD
Countries. Journal of Economic Policy Reform. Vol. 19, issue 4. Pp 386-395
Deger, S. & Sen, S. (1990b). Military Expenditure: The Political Economy of International
Security. New York: Oxford University Press.
Derouen, K., & Heo, U. (2000). Defense Contracting and Domestic Politics. Political Research Quarterly. Vol 53(4), 753-769.
Dunne, J. P., Smith, R. P. & Willenbockel, D. (2005). Models of Military Expenditure and
Growth: A Critical Review. Defence and Peace Economics. Vol 16 (6), pp 449–461. doi:10.1080/10242690500167791.
Dunne, J. P., Perlo-Freeman, S. & Smith, R. P. (2008). The Demand for Military
Spending: Hostility versus Capability. Defence and Peace Economics. Vol. 19,
No. 2, pp 293-302.
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Global Arms Trade: A Handbook. London: Routledge. PP. 293-305
Dunne, J. P. & Tian, N. (2013).Military Expenditure and Economic Growth: A Survey. The
Economics of Peace and Security Journal. Vol. 8, No. 1, pp 5-11.
Edame, G. E. &Nwankwo, C. (2013).The Interaction between Defence Spending, Debt
Service Obligation and Economic Growth in Nigeria.Research Journal of Finance and Accounting. Vol.4, No.13, pp 61- 73
Egbefo, D. O. & Salihu, H. A. (2014). Internal Security Crisis in Nigeria: Causes, Types,
Effects and Solutions. International Journal of Arts and Humanities.Vol. 3(4), No 12, pp 176-195.
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Developing Countries: An Overview: in Keefer, P., Loayza, N. (Eds.), Terrorism, Economic. Development and Political Openness. Cambridge University Press, NewYork, NY, 17-47.
Fasanya, I., & Akinbowale, S. (2019). Modelling the return and volatility spillovers of crude oil and food prices in Nigeria. Energy, 169, 186-205.
Feder, G. (1983). On Exports and Economic Growth. Journal of Development Economics. 12
(1–2): 59–73. doi:10.1016/0304-3878(83)90031-7.
Frey, B. S., Luechinger, S. & Stutzer, A. (2007). Calculating Tragedy: Assessing the Costs of
Terrorism. Journal of Economic Surveys. Vol 21(1), pp 1-24.
Gleditsch, N. P. & Theisen, O. M. (2006). Resources, the Environment and Conflict. Centre
for the Study of Civil War, PRIO, Norwegian University of Science and Technology, Trondheim, GECHS Volume/Gleditsch GECHS Chapter.
Homer-Dixon, T. (1999). Environment, Scarcity and Conflict. Princeton, NJ: Princeton
University Press.
Huang, C., & Mintz, A. (1990). Ridge Regression Analysis of the Defence-growth Tradeoff
in the United States. Defence Economics. Vol 2 (1): 29–37. doi:10.1080/10430719008404676.
Jackson, B. A., Dixon. L. & Greenfield, V. A. (2007). Economically Targeted Terrorism, A
Review of the Literature and a Framework for Considering Defensive Approaches, Santa Monica: RAND Corporation.
Keller, K., Poutvaara, P. & Wagener, A. (2009). Military Draft and Economic Growth in
OECD Countries.Defence and Peace Economics.Vol 20 (5), pp 373–393. doi:10.1080/10242690802332994.
Khidmat, W. B., Wang, M., & Iqbal, F. (2018). Impact of Defense Spending on Economic Growth: Evidence from
Developing Nations of Asia. Journal of Sustainable Development Studies. Vol 11(2)
Knapp, P. (1994). One World–Many Worlds: Contemporary Sociological Theory (2nd Ed.).
HarperCollins College Div, pp. 228–246. Online summary ISBN 978-0-06-501218.
Kollias, C., Manolas, G., & Paleologou, S. M. (2004). Defence expenditure and economic growth in the European Union: a causality analysis. Journal of Policy Modeling. Vol 26(5), pp 553-569.
Marx, K. & Engels, F. (1848). The Communist Manifesto, introduction by Martin Malia
(New York: Penguin group, 1998).Available on http://en.wikipedia.org/wiki/Conflict_theory.
Mbah, S. A., Agu, O. C. & Umunna, G. (2016). Impact of External Debt on Economic
Growth in Nigeria: An ARDL Bound Testing Approach. Journal of Economics and Sustainable Development. Vol.7, No.10, pp 16-26
McKenna, J. (2005). Implications of Transnational Terrorism on International Trade.
available at http://www.econ.duke.edu/dje/2006/McKenna.pdf Nigerian Economic Fact Sheet, (2011). Available at http://photos.state.gov/libraries/nigeria/231771/Public/December-EconomicFactSheet.pdf.
Ojide M. G., Eke F. A., Agu O. C and Ojide K. C. (2020). Socio-economic appraisal of agitations by local oil communities: Evidence from Nigeria. Socio-Economic Planning Sciences journal homepage: http://www.elsevier.com/locate/seps
Okoli, T. T., Mbah, S. A. and Agu, O. C. (2016). Exchange Rate Volatility and Inflation:
The Nigerian Experience. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.7, No.10, 2016.
Olabode, P. O. (2012). Defense Spending and Poverty Reduction in Nigeria. American
Journal of Economics. Vol. 2(6), pp 122-127
Oriakhi, D. & Osemwengie, P. (2012).The Impact of National Security on Foreign Direct
Investment in Nigeria: An Empirical Analysis. Journal of Economics and Sustainable Development. Vol.3, No.13, pp 88-97.
Peterside, Z. B. (2014).The Military and Internal Security in Nigeria: Challenges and
Prospects. Mediterranean Journal of Social Sciences.Vol. 5, No 27, pp1301-1307.
Ram, R. (1986). Government Size and Economic Growth: A New Framework and Some
Evidence from Cross-section and Time-series Data. The American Economic Review. Vol 76 (1): 191–203. doi:10.2307/1804136.
Ram, R. (1995). Chapter 10 Defense Expenditure and Economic Growth. In Handbook of
Defense Economics, edited by Keith Hartley and Todd Sandler, Vol. 1, 251–274. Elsevier. http://www.sciencedirect.com/science/article/pii/S1574001305800122.
Sami, A. K. & Mbah, S. A. (2018). External Debt and Economic Growth: The Case of
Emerging Economy. Journal of Economic Integration. Vol 33, No.1, pp 1141~1157.
Sheikh, M. R., & Chaudhry, I. S. (2016). Do defense expenditures augment economic growth
in Pakistan and India? A Deger-type analysis using GMM approach. Pakistan Journal of Commerce and Social Sciences (PJCSS). Vol 10(3), pp 525-546.
Suberu, R. T. (2001). Federalism and Ethnic Conflict in Nigeria. Washington, D.C.: United
States Institute of Peace
Watts, M. J. (2015). The origins of political ecology and the rebirth of adaptation as a form of thought. The Routledge handbook of political ecology, 19-50.
Development: Evidence from Nigeria. Journal of Studies in Social Sciences. Vol 1, No 1, pp 1-30.
Adeyeye, P. O., Akinuli, B. O. & Ayodele, S. O. (2016). The Nexus between Security
Expenditure and Foreign Direct Investment in Nigeria. IOSR Journal of Business and Management (IOSR-JBM). Vol. 18, Issue 11, Pp 83-89.
Agu, O. C. and Nyatanga, P. (2020).An Investigation into the Crude Oil Price Pass-Through to
Economic Growth in Nigeria.ACTA UniversitatisDanubius.Vol 16, No 1, pp. 82 - 95.
Akhemonkhan, I. A., Raimi, L. and Ogunjirin, O. D. (2012). Corporate Social Responsibility
and Entrepreneurship (CSRE): Antidotes to Poverty, Insecurity and Underdevelopment in
Akhemonkhan, I. A., Raimi, L. & Ogunjirin, O. D. (2012). Corporate Social Responsibility and
Entrepreneurship (CSRE): Antidotes to Poverty, Insecurity and Underdevelopment in Nigeria. Presented at the 6th International Conference held in Universiti de Lome, Togo from November 1-2
Aminu, M. U. & Abu Bakar, A. S. (2016). The Interactional Impact of Defense Expenditure
and Arms Importation on Economic Growth in Nigeria: An Autoregressive Approach. International Journal of Economics and Financial Issues. Vol. 6(2), pp 538-543.
Augier, M., McNab, R., Guo, J. & Karber, P. (2017). Defense spending and economic growth:
Evidence from China, 1952–2012. Defence and Peace Economics. Vol. 28:1, pp 65-90.
Bai, J., & Perron, P. (2003). Computation and analysis of multiple structural change
models. Journal of applied econometrics. Vol 18(1), pp 1-22.
Bandyopadhyay, S., Sandler, T., & Younas, J. (2011). Foreign Direct Investment, Aid, and
Terrorism: An Analysis of Developing Countries. Federal Reserve Bank of St. Louis Working Papers
Bredino, S., Fiderikumo, P. and Adesuji, A. (2018). Impacts of Capital Flight on Economic
Growth in Nigeria: An Economic Approach. Journal of Business and Economic Development. Vol 3(1), pp 22-29.
Connolly, M. & Li, C. (2016). Government Spending and Economic Growth in the OECD
Countries. Journal of Economic Policy Reform. Vol. 19, issue 4. Pp 386-395
Deger, S. & Sen, S. (1990b). Military Expenditure: The Political Economy of International
Security. New York: Oxford University Press.
Derouen, K., & Heo, U. (2000). Defense Contracting and Domestic Politics. Political Research Quarterly. Vol 53(4), 753-769.
Dunne, J. P., Smith, R. P. & Willenbockel, D. (2005). Models of Military Expenditure and
Growth: A Critical Review. Defence and Peace Economics. Vol 16 (6), pp 449–461. doi:10.1080/10242690500167791.
Dunne, J. P., Perlo-Freeman, S. & Smith, R. P. (2008). The Demand for Military
Spending: Hostility versus Capability. Defence and Peace Economics. Vol. 19,
No. 2, pp 293-302.
Dunne, J. P. and Uye.M. (2010). Military Spending and Development, in A. Tan, ed. The
Global Arms Trade: A Handbook. London: Routledge. PP. 293-305
Dunne, J. P. & Tian, N. (2013).Military Expenditure and Economic Growth: A Survey. The
Economics of Peace and Security Journal. Vol. 8, No. 1, pp 5-11.
Edame, G. E. &Nwankwo, C. (2013).The Interaction between Defence Spending, Debt
Service Obligation and Economic Growth in Nigeria.Research Journal of Finance and Accounting. Vol.4, No.13, pp 61- 73
Egbefo, D. O. & Salihu, H. A. (2014). Internal Security Crisis in Nigeria: Causes, Types,
Effects and Solutions. International Journal of Arts and Humanities.Vol. 3(4), No 12, pp 176-195.
Enders, W., & Sandler, T. (2008). Economic Consequences of Terrorism in Developed and
Developing Countries: An Overview: in Keefer, P., Loayza, N. (Eds.), Terrorism, Economic. Development and Political Openness. Cambridge University Press, NewYork, NY, 17-47.
Fasanya, I., & Akinbowale, S. (2019). Modelling the return and volatility spillovers of crude oil and food prices in Nigeria. Energy, 169, 186-205.
Feder, G. (1983). On Exports and Economic Growth. Journal of Development Economics. 12
(1–2): 59–73. doi:10.1016/0304-3878(83)90031-7.
Frey, B. S., Luechinger, S. & Stutzer, A. (2007). Calculating Tragedy: Assessing the Costs of
Terrorism. Journal of Economic Surveys. Vol 21(1), pp 1-24.
Gleditsch, N. P. & Theisen, O. M. (2006). Resources, the Environment and Conflict. Centre
for the Study of Civil War, PRIO, Norwegian University of Science and Technology, Trondheim, GECHS Volume/Gleditsch GECHS Chapter.
Homer-Dixon, T. (1999). Environment, Scarcity and Conflict. Princeton, NJ: Princeton
University Press.
Huang, C., & Mintz, A. (1990). Ridge Regression Analysis of the Defence-growth Tradeoff
in the United States. Defence Economics. Vol 2 (1): 29–37. doi:10.1080/10430719008404676.
Jackson, B. A., Dixon. L. & Greenfield, V. A. (2007). Economically Targeted Terrorism, A
Review of the Literature and a Framework for Considering Defensive Approaches, Santa Monica: RAND Corporation.
Keller, K., Poutvaara, P. & Wagener, A. (2009). Military Draft and Economic Growth in
OECD Countries.Defence and Peace Economics.Vol 20 (5), pp 373–393. doi:10.1080/10242690802332994.
Khidmat, W. B., Wang, M., & Iqbal, F. (2018). Impact of Defense Spending on Economic Growth: Evidence from
Developing Nations of Asia. Journal of Sustainable Development Studies. Vol 11(2)
Knapp, P. (1994). One World–Many Worlds: Contemporary Sociological Theory (2nd Ed.).
HarperCollins College Div, pp. 228–246. Online summary ISBN 978-0-06-501218.
Kollias, C., Manolas, G., & Paleologou, S. M. (2004). Defence expenditure and economic growth in the European Union: a causality analysis. Journal of Policy Modeling. Vol 26(5), pp 553-569.
Marx, K. & Engels, F. (1848). The Communist Manifesto, introduction by Martin Malia
(New York: Penguin group, 1998).Available on http://en.wikipedia.org/wiki/Conflict_theory.
Mbah, S. A., Agu, O. C. & Umunna, G. (2016). Impact of External Debt on Economic
Growth in Nigeria: An ARDL Bound Testing Approach. Journal of Economics and Sustainable Development. Vol.7, No.10, pp 16-26
McKenna, J. (2005). Implications of Transnational Terrorism on International Trade.
available at http://www.econ.duke.edu/dje/2006/McKenna.pdf Nigerian Economic Fact Sheet, (2011). Available at http://photos.state.gov/libraries/nigeria/231771/Public/December-EconomicFactSheet.pdf.
Ojide M. G., Eke F. A., Agu O. C and Ojide K. C. (2020). Socio-economic appraisal of agitations by local oil communities: Evidence from Nigeria. Socio-Economic Planning Sciences journal homepage: http://www.elsevier.com/locate/seps
Okoli, T. T., Mbah, S. A. and Agu, O. C. (2016). Exchange Rate Volatility and Inflation:
The Nigerian Experience. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.7, No.10, 2016.
Olabode, P. O. (2012). Defense Spending and Poverty Reduction in Nigeria. American
Journal of Economics. Vol. 2(6), pp 122-127
Oriakhi, D. & Osemwengie, P. (2012).The Impact of National Security on Foreign Direct
Investment in Nigeria: An Empirical Analysis. Journal of Economics and Sustainable Development. Vol.3, No.13, pp 88-97.
Peterside, Z. B. (2014).The Military and Internal Security in Nigeria: Challenges and
Prospects. Mediterranean Journal of Social Sciences.Vol. 5, No 27, pp1301-1307.
Ram, R. (1986). Government Size and Economic Growth: A New Framework and Some
Evidence from Cross-section and Time-series Data. The American Economic Review. Vol 76 (1): 191–203. doi:10.2307/1804136.
Ram, R. (1995). Chapter 10 Defense Expenditure and Economic Growth. In Handbook of
Defense Economics, edited by Keith Hartley and Todd Sandler, Vol. 1, 251–274. Elsevier. http://www.sciencedirect.com/science/article/pii/S1574001305800122.
Sami, A. K. & Mbah, S. A. (2018). External Debt and Economic Growth: The Case of
Emerging Economy. Journal of Economic Integration. Vol 33, No.1, pp 1141~1157.
Sheikh, M. R., & Chaudhry, I. S. (2016). Do defense expenditures augment economic growth
in Pakistan and India? A Deger-type analysis using GMM approach. Pakistan Journal of Commerce and Social Sciences (PJCSS). Vol 10(3), pp 525-546.
Suberu, R. T. (2001). Federalism and Ethnic Conflict in Nigeria. Washington, D.C.: United
States Institute of Peace
Watts, M. J. (2015). The origins of political ecology and the rebirth of adaptation as a form of thought. The Routledge handbook of political ecology, 19-50.
Published
2021-02-15
How to Cite
Mbah, S. A., Agu, O. C., & Aneke, C. E. (2021). Does Internal Security Expenditure Impact on Economic Growth in Nigeria? Array. Acta Universitatis Danubius. Œconomica, 17(2). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/715
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