Moderating Effect of Corruption and Easy of Doing Business on the relationship between Defence Expenditure and Economic Growth in Nigeria

Abstract

The global economy has witnessed terrific increase in security challenges in recent years; this has informed a green-eyed attention on the defence expenditure of many nations across the globe with a view of mitigating the challenges. In Nigerian, the
situation seems to be at variance with defense expenditure been on a steady increase but more security challenges witnessed on daily basis. Given this particular challenge and the gap existing in literature, this study seeks to examine the moderating effect of
corruption and ease of doing business on the relationship between defence expenditure and economic growth in Nigeria. In this studycorruption is measured using the World Bank corruption index, ease of doing business is measured using World Bank ease of doing index while economic growth is measured using GDP. The study adopted an expost facto research design and time series data was collected from Nigerian Code of Conduct Bureau and SPRI from 1988-2018. The study aligned with Keynesian Public Expenditure Hypothesis. The study also, adopted the use of ordinary least square regression for the purpose of data analysis after all times series assumptions were met. The result shows that, the interacting effect of corruption have positive and significant effect on the relationship between defence expenditure and economic growth in Nigeria. Also, that the moderating effect of ease of doing business have positive but insignificant effect on the relationship between defence expenditure and economic growth in Nigeria. The study recommended that government should strengthen its fight against corruption by consistently monitoring public expenditures especially, expenditures that directly affect economic stability and growth such as defence.