Fiscal decentralization in Turkey: an empirical assessment of the transfer rule
Author
Özdemir, Begüm
Advisor
Neyaptı, Şen Bilin
Date
2018-07Publisher
Bilkent University
Language
English
Type
ThesisItem Usage Stats
218
views
views
0
downloads
downloads
Abstract
This thesis analyzes whether the fiscal relations between the central and local
governments of Turkey can be solely explained by socio-economic and demographic
factors or the regional and political positions of cities also affect it. We
use a balanced panel dataset consisting of all of the 81 cities of Turkey over the
years 2008-2012. Our main dependent variables are transfers and government
compensation. We define government compensation as the total government
spending made in a city excluding local own revenues. Other fiscal aggregates
such as local own revenues and expenditures, or fiscal indicators such as fiscal
decentralization and financial independence, defined as the share of local governments
spending financed by its own revenues, are also analyzed. Regression
analysis and robustness tests showed the following: (i) Socio-economic structure
of cities are significantly associated with the amount of transfers and government
compensation; which means that the transfer rule of Turkey, as an institutional
mechanism, is quite successful addressing regional socio-economic differences.
Besides, there is no robust effect of political parties on the amount of
transfers and government compensation. (ii) Our analysis also shows that there
is a significant association between political parties and local expenditures, revenues,
and expenditure decentralization.