Military spending and economic growth in South Africa

This paper undertakes an empirical analysis of the economic effects of mili tary spending on the South African economy. It estimates a neo-classical mo del common in the literature at the level of the macroeconomy and at the le vel of the manufacturing sector. An attempt is made to improve upon the mod el by allowing the data to determine the dynamic structure of the model thr ough an ARDL procedure. No significant impact of military spending is found in aggregate, but there is a significant negative impact for the manufactu ring sector. This suggests that the cuts in domestic military procurement t hat have occurred since 1989 could lead to improved economic performance in South Africa through their impact on the manufacturing sector.