Determinants and economic effects of military expenditure in Kenya (1988-2005)

Abstract

The study looks at the determinants and economic effects of military expenditure in Kenya (1988-2005), using both primary (interviews) and secondary sources of data. On the whole, the expenditure patterns significantly resembled the global patterns during the period. In particular, the expenditures declined as a percentage of gross domestic product. Specifically, the expenditure declined drastically between 1988 and 1994 thereafter, fluctuated moderately, although however, it rose steadily in the new millennium. The expenditures imposed considerable economic burden whose average expenditure was 1.9 percent of the country's gross domestic product (GDP) or $ 7.2 military expenditure per capita in 2005. There was positive correlation between gross domestic product growth and per capita spending. The expenditures have had both positive and negative effects on the economy and which effects are more significant is still a subject of debate as it has always been since pioneer work by Benoit's (1973, 1978) remains to be seen. For example, human and physical capital grew; foreign exchange earnings rose; gross domestic product rose; stimulation of economic growth through increased capacity utilization; job creation and others. Investment was however, "crowded out". We recommend that the military should be subjected to strict transparent and accountable budgetary accounting, and government wide expenditure controls of procurement. Lastly, because of the high cost of the military burden and associated effects, the future guarantee of long term security lies in the formulation of non -violent means of conflict resolution.