Title of paper

10.3 Effect of Military Spending and Financialization on Economic Growth and their Implications for the Political Federation of Africa

Presenter information

Jimmy Alani, UgandaFollow

Presenter's country

Uganda

Start Date

18-8-2018 2:00 PM

End Date

18-8-2018 3:00 PM

Location

1920 Sangren Hall

Submission type

Abstract

Abstract

The paper examined the effects of military spending and financialization on economic growth in Ethiopia and attempted to point out their implications for political unification of Africa as one federal system of government. The Generalized Least Squares (GLS) method was used in the data analysis. Data for the study were obtained from the United Nations, Global Economy and Stockholm International Peace Research Institute (SIPRI). First, the paper found that in Ethiopia within the 1990 to 2015 period growth in military spending, financialization, capital productivity and labor productivity could have had negative contributions to economic growth. Second, it found that growth in population and technical progress could have had profound positive effects on economic growth of Ethiopia within the same given period. Third, it found that growth in military spending and financialization could have had negative contributions to technological progress of the country. Finally, the paper found that population growth, growth in income per capita, labor productivity growth and growth in capital productivity could have had positive contributions to technical progress in the country within the same given period. The findings show that much of Ethiopia’s economic growth came from its population growth and technical progress. Thus, the economic growth of Ethiopia could have been much higher if Ethiopia, along with other African countries, had a one union government and acted like the Peoples Republic of China to advance Africa’s industrialization process through technology transfer, acquisition, innovation and diffusion. The other implication of the study is that a united continental system of government could minimize military spending and financialization. Such declines might come as a result of pooling military, natural, human and economic resources to enable Africa to enjoy economies of scale. Such economies of scale might accrue from (a) technology diffusion and (b) sharing of (i) a vast market, strategic projects (e.g. effective and prompt quelling of internal wars, having minimal threats arising from borders, etc.), (ii) ports for international trade and (iii) military resources along with others.

Keywords

resource curse, federal system, government, ethnicity, economies of scale

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Aug 18th, 2:00 PM Aug 18th, 3:00 PM

10.3 Effect of Military Spending and Financialization on Economic Growth and their Implications for the Political Federation of Africa

1920 Sangren Hall

The paper examined the effects of military spending and financialization on economic growth in Ethiopia and attempted to point out their implications for political unification of Africa as one federal system of government. The Generalized Least Squares (GLS) method was used in the data analysis. Data for the study were obtained from the United Nations, Global Economy and Stockholm International Peace Research Institute (SIPRI). First, the paper found that in Ethiopia within the 1990 to 2015 period growth in military spending, financialization, capital productivity and labor productivity could have had negative contributions to economic growth. Second, it found that growth in population and technical progress could have had profound positive effects on economic growth of Ethiopia within the same given period. Third, it found that growth in military spending and financialization could have had negative contributions to technological progress of the country. Finally, the paper found that population growth, growth in income per capita, labor productivity growth and growth in capital productivity could have had positive contributions to technical progress in the country within the same given period. The findings show that much of Ethiopia’s economic growth came from its population growth and technical progress. Thus, the economic growth of Ethiopia could have been much higher if Ethiopia, along with other African countries, had a one union government and acted like the Peoples Republic of China to advance Africa’s industrialization process through technology transfer, acquisition, innovation and diffusion. The other implication of the study is that a united continental system of government could minimize military spending and financialization. Such declines might come as a result of pooling military, natural, human and economic resources to enable Africa to enjoy economies of scale. Such economies of scale might accrue from (a) technology diffusion and (b) sharing of (i) a vast market, strategic projects (e.g. effective and prompt quelling of internal wars, having minimal threats arising from borders, etc.), (ii) ports for international trade and (iii) military resources along with others.