Sub Saharan African (SSA) countries are ranked low below 40 out of 100 when compared with other regions in terms of institutional quality. These institutional qualities include voice and accountability, perception of corruption, regulatory quality, rule of law etc. These factors measure government’s response to public demand. Institutions are seen as the driving force of any economy. They dictate how the economy is organized. North America and Europe have very high ranking in institutional quality. SSA countries have an average of less than 40 in institutional quality (International Country Risk Guide. This suggests that for SSA, these institutions are not in tandem with other region. This study examined the influence of institutional determinants of defense expenditure in Sub-Saharan Africa (SSA) countries. The study period covered the year 2000 to 2015. The Generalized method of moments was used as the econometric technique for estimation. Variables such as previous defense spending, rule of law, political stability, and government effectiveness were used. The findings revealed that institutional factors such as past defense spending, government effectiveness, rule of law and political stability were statistically significant. The study therefore recommends that policy makers should allow institutions to work so as to avoid wasteful spending by the governments in SSA countries.

Keywords: Institutional, determinants, defense, Sub-Saharan Africa

JEL Classification: H5, H41