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Size of the Military Sector and Economic Growth: A Panel Data Analysis of Africa and Latin America

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  • Michael D. Stroup
  • Jac C. Heckelman

Abstract

We estimate the influence of defense spending and military labor use on economic growth in African and Latin American countries. Our model integrates disparate implications from the defense economics literature into a Barro-style model of economic growth that controls for political and economic institutional variation across countries. Our panel data analysis of 44 countries in Africa and Latin America from 1975 to 1989 also controls for cross-country variation in lost human capital and public sector production inefficiencies. We find empirical evidence that the defense burden on economic growth is non-linear, with low levels of military spending increasing economic growth but higher levels of military spending decreasing growth. We also find evidence that the influence of military labor use on growth is non-linear, and exhibits a greater drag on economic growth in those countries with relatively higher levels of adult male education attainment.

Suggested Citation

  • Michael D. Stroup & Jac C. Heckelman, 2001. "Size of the Military Sector and Economic Growth: A Panel Data Analysis of Africa and Latin America," Journal of Applied Economics, Taylor & Francis Journals, vol. 4(2), pages 329-360, November.
    • Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:329-360
    DOI: 10.1080/15140326.2001.12040568
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    References listed on IDEAS

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    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, December.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    3. repec:bla:econom:v:63:y:1996:i:252:p:649-72 is not listed on IDEAS
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    More about this item

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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