AN EMPIRICAL ASSESSMENT OF LONG RUN COINTEGRATION AND GRANGER CAUSALITY BETWEEN MILITARY EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA (1987 – 2022)
Eduoku Joe Joseph (PhD) and Martha Musa
Volume 3 Issue 2
Abstract
Nigeria has witnessed a lot of security and developmental concerns in the last three decades which have engendered widespread perceptions that there may be some relationship between military expenditure and economic growth and development. This has led to a flurry of several investigations into discovering the nature of the relationship between defence spending and economic growth and development. To confirm the nature of the nexus, this study represents one of such enquiries that apply Johansen cointegration and Granger causality tests to scrutinise the long run equilibrium relationship and the causality between military expenditure (ME) and economic growth (GDP) for the instance of Nigeria. Annual time series data covering the period, 1987 - 2022 was used to conduct the experimental analysis. The findings of the study indicate that, military spending and economic growth are cointegrated in the long run. However, the results of the Granger causality test revealed that there is no directional relationship running from economic growth to military spending and vice versa. This means that the study did not observe any causality running from either military spending to economic growth or from economic growth to military expenditure within the study period. Keywords: Economic Growth, Development, Military Expenditure, Security, Cointegration, Granger Causality Test.
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