The Demand for Military Spending in Sub-Saharan Africa

Abstract

This dissertation examines military spending in Sub-Saharan Africa (SSA). It comprises three chapters. Chapter one uses documents and key informant interviews to examine four important issues related to Uganda's defence budget: the process leading to its formulation, the key actors involved in that process, the structure of military expenditures, and the internal and external threat environment. The analysis shows that defence spending in Uganda generally follows a process of intra-governmental bargaining with political oversight. Despite the government's military roots, and the President's ultimate control over military spending, the defence budget has not overwhelmed other government priorities. In addition, the nature and level of internal and external threats to Uganda do not seem to pose a serious challenge to its security. While there are several perceived threats that may influence Uganda's defence budget, the limited volatility of military spending over time suggests that overall there is a perception that Uganda's government has been able to provide a reasonable level of security without compromising its obligations to promote social and economic development as well. Chapter two examines empirically the factors associated with the level and changes in military budget in Uganda, using an auto-regressive distributed lag model. The analysis shows that there is a long-run relationship between Uganda's military expenditure and real GDP, net official development assistance and security dynamics at regional level. Detailed analysis about which neighbour's military spending affects Uganda, however, is often different from expectations based on the interviews. Chapter three uses panel data to examine military spending in a sample of 30 of Sub-Saharan African countries for the period of 1988-2016. Two distinct specifications are performed, a fixed effects model and a dynamic panel data model. The results of different regressions show that the size of the economy, demography, military spending of neighbouring countries, and the lagged of military spending are the most important explanatory variables. Furthermore, the estimations of the fixed effect models show that the nature of the political regime and civil war also influence the defence budget. However, the estimations of the dynamic panel models fail to corroborate this influence.