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Publication date: 12 August 2024

Isiaka Akande Raifu, Damian Chidozie Uzoma-Nwosu and Alarudeen Aminu

This study explored how institutional quality influences the relationship between military spending and education in Africa.

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Abstract

Purpose

This study explored how institutional quality influences the relationship between military spending and education in Africa.

Design/methodology/approach

This study used data from 43 African countries spanning the years 2000–2021. Two estimation methods were employed to address various issues: Fixed Effects with Driscoll-Kraay standard errors and the Two-Step System Generalised Method of Moments. The Fixed Effects with Driscoll-Kraay standard error method was used to obtain reliable standard errors and inferences from the estimated coefficients of the fixed effects model. Meanwhile, the problem of endogeneity between military spending and education was addressed using the Two-Step System Generalized Method of Moments (GMM).

Findings

The results indicated that military spending negatively impacts both the quality and quantity of education. However, both institutional quality and the interaction term (institutional quality*military spending) have positive effects on both measures of education, suggesting that better institutional quality mitigates the negative effect of military spending on education outcomes.

Practical implications

This study shows that institutional quality dampens the negative effect of military spending on education, especially the quality of education. Hence, African countries should prioritize strengthening their institutions to ensure optimal allocation and utilization of government funds for the benefit of their citizens.

Originality/value

This is the first study to examine the moderating role of institutional quality in the relationship between military spending and education, focusing on both the quantity and quality of education.

Details

Journal of Business and Socio-economic Development, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2635-1374

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