The Impact of Military Spending on Armed Conflicts in Sub-Saharan Africa

Idrissa Aladji AYA
Ph.D. Candidate in Development Economics
CERDI-UCA-CNRS-IRD

This research focuses on the security challenges faced by sub-Saharan African countries. Since 2000, these countries have experienced a substantial increase in military spending, mainly due to persistent and intense armed conflicts. Conflict hampers socio-economic development and risks creating vicious circles of instability, ultimately increasing the burden on public finances. The study analyses the relationship between military spending and the intensity of armed conflict. To answer the research question, we make the following basic assumption: an increase in military spending at the margin should reduce the intensity of armed conflict, given the deterrent effect of such spending. Using a dynamic probit model, we find that military spending reduces the intensity of armed conflict in sub-Saharan Africa.

Conflicts in sub-Saharan Africa: an obstacle to development

In recent decades, the African continent has been characterized by growing insecurity and threats from rebel, terrorist and jihadist groups. This situation of fragility is much more pronounced in sub-Saharan African countries, where numerous attacks and threats from armed groups have hit. Insecurity is an obstacle to all prospects for socio-economic development (World Bank, 2017). It hinders the movement of goods and people, leading to a slowdown in economic activity. In general, a conflict situation negatively affects macroeconomic aggregates; this negative effect is more visible in GDP growth.

Why is it important to analyze military spending in sub-Saharan Africa?

The economic interest in analysing the effectiveness of military spending is that to the extent that military spending crowds out public investment spending, the ineffectiveness of military spending in reducing conflict could be a double whammy for a state. Not only do they weigh all the more heavily on the public finances of African countries, which are already highly dependent on external financing, but they also lead to a low level of financing for other public spending likely to reduce the risk of conflict, ultimately the intensity of armed conflicts. 

Our study analyzes the relationship between military spending and the intensity of armed conflict. To answer the research question, we make the following basic assumption: an increase in military spending at the margin should reduce the intensity of armed conflict, given the deterrent effect of such spending. This assumption is based on the demand function of military spending. Security is a public good, the State, in its sovereign function, spends more in situations of insecurity to maximize collective well-being under the constraint of financing resources.

Analysis and contributions to the existing literature

In the economic literature, among the significant works that analyze the relationship between military spending and conflict, we can cite those of Collier and Hoeffler (2002) and Phillips, (2015). Collier and Hoeffler (2002) conclude that the effectiveness of military spending depends on the period. They are particularly effective in times of active conflict, as opposed to a period of risk of conflict. Military spending can be characterized as a public evil when it does not deter the risk of conflict. Military spending can be ineffective because of the phenomenon of the arms race. Abstracting from the arms race and in a developing country context, Phillips (2015) finds that conflict is positively associated with levels of military spending. The effect of military spending on conflicts is conditioned by its magnitude.

This study makes several significant contributions to the existing literature, analytically and methodologically. First, it contributes to the literature by taking into account the persistence of the intensity of armed conflicts through a dynamic probit model. Taking into account the dynamic model allows for the examination of heterogeneity between countries in terms of initial differences in the level of intensity of armed conflict.  Second, the study contributes to the literature by empirically highlighting the channels through which military spending affects the effectiveness of armed conflict. Finally, the study also contributes to the literature on the determinants of armed conflict. Empirical evidence on determinants such as social fractionalization, income inequality, poverty, climate shocks, and natural resources is available in the literature. The study highlights ethnic and religious tensions as determinants of armed conflicts in sub-Saharan Africa.

Our study concludes that military spending decreases the intensity of conflicts

Between 2000 and 2020, intense armed conflicts in the region resulted in an average of 597 deaths. Military spending accounts for an average of 2.7 per cent of GDP in sub-Saharan Africa. 

We show that military spending reduces the intensity of conflicts; on average, a 1% increase in the ratio of military spending to GDP decreases the probability of armed conflict intensity by 0.012 percentage points. They significantly reduce low-intensity conflicts more than high-intensity conflicts. We also find that this phenomenon occurs in countries affected by conflict. In conflict-free countries, it tends to reduce the risk of conflict. 

Analysis of transmission channels shows that military spending affects the intensity of conflicts mainly through military capabilities. Strong institutions are essential to ensure the effectiveness of military spending. 

The determinants of armed conflict (low level of development, poverty, inequality, climate shocks, religious tensions and ethnic tensions) play a very important role in explaining armed conflicts in sub-Saharan Africa.

Recommendations

This study recommends balancing military and capital expenditures to ensure the continued progress of development projects. Such a balance can help tackle key factors contributing to conflict, including poverty and unemployment in sub-Saharan Africa. Additionally, beyond military spending, improving socio-economic conditions, enhancing resilience to climate change, and establishing a stable political and institutional framework could further mitigate armed conflict activities.

Article reference

Idrissa Aladji AYA, Effectiveness of military spending in reducing the intensity of armed conflict in Sub-Saharan Africa, Oxford Economic Papers, 2024, gpae044.

Bibliographical references

Collier, P. and Hoeffler, A. (2002b). Military Expenditure : Threats, Aid, and Arms Races. SSRN Scholarly Paper ID 636289, Social Science Research Network, Rochester, NY.

Phillips, B. J. (2015). Civil war, spillover and neighbors’ military spending. Conflict Management and Peace Science, 32(4):425–442. Publisher: SAGE Publications Ltd.

World Bank (2017). Annual report.