Military Expenditure and Socio-Economic Development in Nigeria: A Guns–Butter Perspective.

Abstract

This study examined the relationship between military expenditure and socio-economic development (SED) in Nigeria from 1990 to 2024 using the Autoregressive Distributed Lag (ARDL) framework. Annual time-series data were obtained from the World Bank, the Central Bank of Nigeria, and the National Bureau of Statistics. The ARDL bounds testing approach confirmed a long-run equilibrium relationship among the variables. Short-run results showed that changes in military expenditure exerted a positive and statistically significant effect on socio-economic development, indicating that defence spending improved security conditions, stabilised investment, and supported employment. Social sector spending also positively influenced SED in the short run, reflecting welfare gains from investments in education and healthcare. In contrast, government revenue exerted a negative effect on SED, suggesting inefficiencies in fiscal allocation and resource utilisation. Inflation exhibited a marginal positive effect, implying that moderate price changes stimulated economic activity. In the long run, sustained military expenditure exerted a negative and significant impact on socio-economic development, underscoring the opportunity cost of prolonged defence spending and its tendency to divert resources from productive and human-capital sectors. Conversely, social sector spending remained a strong driver of development, while inflation was insignificant and government revenue continued to impede SED. Interaction effects between military and social spending were insignificant, although lagged interactions indicated possible crowding-out effects. The study concluded that military expenditure supported short-term development but undermined socio-economic progress in the long run. It recommended a fiscal strategy consistent with Guns–Butter framework, emphasising defence efficiency, social sector investment, and institutional governance to achieve development.