The literature on military spending and growth has become extremely large and diverse and has reached no clear consensus. This lack of consensus should not be unexpected, because there are a number of issues that make the empirical analysis of the relationship difficult to undertake and make it difficult to identify the particular impact of military spending on growth. Some of these issues have had relatively little attention in the literature. The historical context can affect the military spending and growth relation, so there is no reason not to expect different results for different periods. There are various theoretical perspectives that can be used in any analysis and numerous channels through which military spending can affect growth, which means that studies can differ in how they specify the models. In estimating models, a range of econometric techniques have been used, which can affect the results. There also remain issues of identification that present problems for empirical analysis. The observed correlation between output and military expenditure is likely to be negative if the system is driven by strategic shocks and positive if it is driven by economic shocks. Improved military spending data and the existence of some shocks, such as the end of the Cold War, is helping in dealing with identification, but it still remains a concern. Overall, more recent studies show that, in general, it is much more likely that military spending has a negative effect on economic growth than was evident in the past. The issues involved in undertaking any empirical analysis on military spending and growth mean that the debate is likely to continue.
J. Paul Dunne and Nan Tian
The sovereignty of postcolonial African states is largely derived from their recognition by other states and by the United Nations, irrespective of their actual effectiveness. Such international legal sovereignty has been a resource to weak African states, allowing them to endure against the odds, and to their rulers who have instrumentalized it to foster their domestic authority and domination. Yet, African sovereignty has also been a curse. Being exogenous to domestic social and political relations, it tends to isolate and shield rulers from the ruled and predisposes state institutions toward predation. It also standardizes and homogenizes the continent’s institutional landscape in disregard to the wealth and promise of effective institutional arrangements on the ground, to which it denies legitimacy. Despite the equilibrium properties of the African sovereignty regime, there might be opportunities to tweak the system in ways that could unleash more effective and accountable state and nonstate institutions.