Analysis Criteria for Defense Expenditure Performance – Economy, Efficiency, and Effectiveness

Based on the analysis of public expenditure performance, this article discusses the economy, efficiency, and effectiveness of defense expenditure performance, explains the relationship of the three, and emphasizes their unity, interaction, and priority. The defense expenditure performance evaluation system, which is a comprehensive assessment of processes and results, is put forward along with the unification of economy, efficiency, and effectiveness. This system can be used to analyze whether the allocation and use of defense funds have achieved the strategic objectives of the Department of Defense.

Effect of Various Categories of Government Expenditure on Economic Growth in Kenya

In Kenya, government expenditure has been changing tremendously in its composition and size. Noticeably, since Kenya’s independence, government expenditure has witnessed great expansion. However, the country has not achieved consistent economic growth for a long duration of time. Despite the increase in allocation of resources through increasing public spending, economic growth has not grown at the same rate. As such, economic growth did not consummate with the increase in allocation of resources through government expenditure. The study sought to determine the effect of education expenditure, defense expenditure, health expenditure and infrastructure expenditure on economic growth. It used an explanatory research design and secondary time-series data for the period between 1985 and 2018. Data on education expenditure, defense expenditure, health expenditure as well as infrastructure expenditure and economic growth was acquired from Kenya National Bureau of Statistics. The quantitative data was collected, edited and coded into Statistical software known as STATA version 14. Analysis of the quantitative data was based on descriptive as well as inferential statistics. Correlation analysis was employed to assess the strength of correlation between independent and dependent variables whereas regression analysis determined the weight of association between independent and dependent variables. Diagnostic test was performed to test for the regression model assumptions before carrying out regression analysis. The research focused on autocorrelation test, stationarity test, autocorrelation test, normality as well as heteroscedasticity test. The study revealed that education expenditure had a positive effect on economic growth in Kenya. The study found that defense expenditure had a positive effect on economic growth in Kenya. The results revealed that health expenditure had a positive effect on economic growth in Kenya. In addition, the study found that infrastructure expenditure had a positive effect on economic growth. The study concludes that government expenditure has a significant effect on economic growth in Kenya. The study policy implication of the study is that Kenyan government as well as policy makers should formulate policies and guidelines geared towards increasing education expenditure. This will help in ensuring adequacy in a trained, qualified and productive labor that is important in ensuring an improvement in economic growth. In addition, the government of Kenya should allocate at least 15 percent of their total expenditure to the healthcare so as to ensure a productive and healthy workforce. The government also needs to increase infrastructure funding as recommended by the World Bank to between 7 and 9 percent.

Guns versus Butter: An Analysis of the Impact of Military Spending on Economic Growth in a Low-income Country: A Case of Uganda 1970-2018

Background: As part of public expenditure, empirical studies on the impact of military/defense expenditure on the economic growth, particularly in the case of a developing country like Uganda remain still abstruse to both policymakers, researchers, and academicians. There is a scanty agreement in this regard today. For the case of Uganda, a country that has had a fair share of its instabilities and wars, the subject of military expenditure and national security becomes a topic of national importance. And although the country has registered some progress in economic growth, hovering at around 5% annually, its military expenditure as a percentage of GDP has also been raising at an average of 2.5%, and it is projected to continue rising if the present uncertainty in the country remains unabated. Thus, in this study, a time series model is estimated to analyze the association between military/defense expenditure (as % of GDP) and economic growth in Uganda for the period 1970 through 2019. By employing the augmented Solow growth model parameterized through the ARDL model, we test the impact of military expenditure on economic growth in Uganda for both short and long-run scenarios.Results: The findings are indicative that military expenditure does affect economic growth in Uganda although the effect is not significant. Also, the impact of security-related factors such as military expenditure by the neighbors, election year, and conflict type on growth rates seem to be mixed in both short and long-run scenarios. In addition the results reveal that a percentage point change in the level and first lag of military expenditure (Milex) is associated with 0.30 and 2.81 percentage point reduction in GDP growth in Uganda. A similar result is reported in (Islam, 2015; Saba and Ngepah, 2019). However, the impact of military expenditure on the economy has been uncertain depending on the role of the expenditure, for instance, according to (D’Agostino et al., 2012) military expenditure can be growth-enhancing if it is meant to create a peaceful environment for businesses to thrive but it can be detrimental if such expenditure is to finance external wars and internal conflicts, where productive resources like labor and capital are lost thus affecting growth. Conclusion: Several take-home points emerge especially on public expenditure regarding the military versus other productive sectors. For instance governments in developing countries should keenly watch over their respective defense budgets and should thus allocate financial resources in tandem with both internal and external threats to the national security of their countries but also in line with resources allocated to other productive investment sectors like health, education and food productivity, such as agricultural sector in case of Uganda which seem to have direct multiplier growth effects. Besides reduction in military expenditure will avoid the crowding-out effect of productive private investment by government. For the case of Uganda, if such alarming defense expenditures are left unabated, Uganda’s previously registered rates of growth may either stagnate or even deteriorate. Thus an urgent solution is needed. JEL Code: E62 & H5

THE IMPACT OF NATIONAL DEFENSE EXPENDITURE ON GROWTH OF ECONOMY IN SRI LANKA

This study aims to analyze the relationship between defense expenditure and growth of the economy in Sri Lanka applying annual data during the period between 1990-2019 by engaging the ARDL bounds test and the Granger causality test. Economic growth is considered as a dependent variable whereas; defense expenditure, broad money supply, capital investment and exchange rate are considered as independent variables for this study. The findings revealed that defense spending has a significant and positive effect on economic growth in the long- run. Exchange rate, capital investment and broad money supply have a significant and positive influence in the short-run and long-run. Further, the output of the Granger causality confirms the one-way association between the growth of the economy and defense expenditure. The study suggests that government should concentrate more on human capital development rather than spending on defense.

MODELING AND FORECASTING OF INDIA’S DEFENSE EXPENDITURES USING BOX-JENKINS ARIMA MODEL

Many developed and developing countries are at the core of the security and peace agenda concerning rising defense expenditure and its enduring sustainability. The unremitting upsurge in defense expenditure pressurizes the government to rationally manage the resources so as to provide security and peace services in the most efficient, effective and equitable way. It is necessary to forecast the defense expenditure in India which leads the policy makers to execute reforms in order to detract burdens on these resources, as well as introduce appropriate plan strategies on the basis of rational decision making for the issues that may arise. The purpose of this study is to investigate the appropriate type of model based on the Box–Jenkins methodology to forecast defense expenditure in India. The present study applies the one-step ahead forecasting method for annual data over the period 1961 to 2020. The results show that ARIMA (1,1,1) model with static forecasting being the most appropriate to forecast the India’s defense expenditure.

The World Defense Expenditure 2019 and trends in the Covid19 era

This paper focuses on the recent publication of the SIPRI Institute on global defense spending for 2019. The latter is on the rise for 5th consecutive year, climbing to the highest point since 1988, the Cold War era. This fact has multiple interpretations. The most important construe apropos the geopolitical competition, from hegemonic competition between the United States and China to regional ones, can constitute perils to international security with unpredictable and catastrophic consequences for global peace, economy and trade. The recent crisis over the Covid-19 pandemic has expanded the breach between the West and China, raising skepticism or even suspicious on both sides. Relations between the two powers, the United States and China, have deteriorated, threatening global stability while states are unable to find a commonplace for a successful and definitive fight against the pandemic.The unstable geopolitical environment has experienced the burden of the pandemic crisis due to Covid-19. The restrictive measures taken by governments to intercept the pandemic may be the reasoning for restraining defense spending world widely. This prospect can be a future reality if we take into account the cost caused to national and global economy by the protracted lockdown. Therefore, governments may be compelled to increase spending on the welfare state (health infrastructure, support for the lower classes, support for sectors of the economy most affected by the pandemic such as transportation and tourism) by cutting the defense budget. The latter consists a critical indicator of national sovereignty and its fully understandable the fact that is exceptionally difficult for states to make unforced military budget cuts. However, because of the recent extremely critical situations experienced by humanity as a whole, governments should consider limiting their defense spending, which will be monitored closely by the United Nations for a limited time and focus on dealing with the economic and social effects of the lockdown.

IMPLEMENTASI METODE ANALYTICAL HIERARCY PROCESS (AHP) UNTUK ANALISIS FAKTOR KEAMANAN LAUT INDONESIA

Indonesia is an island nation consisting of 17,504 islands and has 81,290 kilometers of coast. Indonesia has 12 (twelve) law enforcement agencies at sea, the twelve institutions have carried out their duties and functions, but have not synergized, so that sea security is not only influenced by the number of institutions, but is influenced by many factors, namely: Political and legal factors, economic factors, security and security factors, socio-cultural factors, environmental factors, technological factors, so that Indonesia needs a marine security model to determine the factors that most influence Indonesian sea security using the Analytical Hierarchy Process (AHP Method). For program calculations we use web programming. Research results: [1] Defense and security = 0.40, [2] Politics and law = 0.22, [3] Technology = 0.14, [4] Environment = 0.09, [5] Economics = 0, 06, [6] Social culture = 0.06. The sub-factor criteria that most influence each factor are as follows: [1] Defense and security = Expenditures (0.28), [2] Politics and law = Division of zones of sea areas (0.37), [3] Technology = Cyber ​​Attack (0.52), [4] Environment = Geographical condition of the disaster zone (0.44), nn [5] Economy = Indonesian economic growth (0.30), [6] Social culture = Maritime cultural awareness (0 , 44). So the factors and sub-factors that most influence on Indonesia's sea security are defense and security factors with the national defense expenditure expenditure sub-factor.