Research Journal of Business and Economic Management

The paper intends to examine the effects of political instability on human development using Panel data for CEMAC countries collected from 1996-2019. After exploring some issues on political instability/ human development and reviewing the relevant literature, the study employs Pedroni’s Panel cointegration testing approach to verify the existence of the long-run relationship. Pairwise Correlation for multicollinearity and Im-Pesaran-Shin unit root were conducted as a pre-estimation test. The model was estimated using the random and fixed effect models, and only the latter was appropriate for interpretation, given that the Hausman test was significant. Tests for normalities, heteroscedasticity and autocorrelation were inevitably verified as postestimation tests. Results of the study report a moderate correlation between social unrest and human development but a strong correlation between the log of military expenditure and human development in CEMAC with the respective coefficients of 0.539 and 0.785. Importantly, there is no serious problem of multicollinearity, and then all the variables are stationary at levels. Pedroni and Kao test indicates the existence of long run panel cointegration for the within and between dimensions of the panel as the null hypothesis of no co-integration is rejected. Hausman’s specification test with a p-value less than 0.05 implies that the fixed effect model is more appropriate for the data. Results of the fixed effect model report a positive and highly significant effect of military expenditure on human development. Meanwhile, the effect of social unrest is negative and also significant in the sub-region. The results suggest that governments and other stakeholders could foster human development with the CEMAC subregion by increasingly and properly sanctioning military expenditure, and equally by stepping up their efforts to reduce social unrest of all forms.