Defense Spending and Poverty Reduction in Nigeria

This study examines the relationship between the components of defense spending and poverty reduction in Nigeria for the period 1990-2010. While most studies on defense spending and poverty rely on monetary measure of poverty, this study constructed poverty index from human development indicators using principal component analysis. Four models were estimated using Dynamic Ordinary Least Square (DOLS) method, two in which poverty index constructed from human development indicators serves as dependent variable and the others in which infant mortality rate serves as dependent variable. The results show that military expenditure per soldier, military participation rate, trade, population and output per capita square were positively related to poverty indicator. They were all found to be statistically significant except trade and output per capita square. Population that was not significant in model four was found to be significant in model two. Military expenditure, secondary school enrolment and output per capita were negatively related to poverty level. However, only total military expenditure was found to be statistically significant in model one and three, while output per capita in model three was found to be statistically significant. Others were statistically insignificant. The findings confirm the trade off between the well-being and capital intensiveness of the military in Nigeria, pointing to the vulnerability of the poor among the Nigerians.