Corruption and instability of Wagner’s law: A structural breaks approach to military spending in the G5‑ Sahel countries
DOI:
https://doi.org/10.18559/rielf.2025.1.2444Keywords:
military expenditure, national revenue, Wagner's law, corruption, multiple structural breaksAbstract
Purpose: This research analyses the relationship between military expenditure and national income with the aim of testing Wagner's law for the G5 Sahel countries over the period 1984 to 2018. The effect of corruption on the stability of this law is also taken into account.
Design/methodology/approach: To achieve these objectives, the model of Peacock and Wiseman (1961) is used and estimated using the multiple structural breaks method of Bai and Perron (2003).
Findings: The results show that this law is confirmed for all the countries of the Sahel G5 with variability according to different time regimes. However, the defense sector, which used to be a superior public good, becomes an inferior one because of corruption. Thus, virtuous governance in the defense sector must be a priority for the G5 Sahel countries in order to allocate resources in an optimal and efficient way.
Originality/value: One of the first contributions of this research is the application of Wagner's Law to military spending. Very few studies have analyzed this law in the African defense sector. The second contribution is the inclusion of corruption in the relationship between GDP and military spending. Efficient and virtuous management of military spending remains one of the conditions for success in the fight against terrorism in the Sahel.
JEL Classification
Time-Series Models • Dynamic Quantile Regressions • Dynamic Treatment Effect Models • Diffusion Processes • State Space Models (C32)
Bureaucracy • Administrative Processes in Public Organizations • Corruption (D73)
Fiscal Policy • Modern Monetary Theory (E62)
National Security and War (H56)
Africa (O55)
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