Does Defence Expenditure Affect Education and Health expenditures in Saharan Africa?

Abstract

This study examines the effects of defence expenditure on education and health expenditures, using data from Saharan African countries over the period 2000-2019. It employs the second-generation panel data tools to diagnose cross-sectional dependence and adopt appropriate tests. It then uses a panel vector autoregressive model estimated by the least squares dummy variable method. The study finds two mixed effects of defence expenditure. First, it finds that defense expenditure affects negatively education expenditure in the short run only. Second, it finds evidence of positive effect of defense expenditure on health expenditure in the short, only. Furthermore, this study finds that defence expenditure has no effect on education and health expenditures in the long run. Finally, this study proposes some policy recommendations to the governments of Saharan African countries.