Why are reforms non-sustained?: a case study of Turkey

Abstract

The factors affecting the reform sustenance are the main topic of this thesis. We focus on the tax financing package that we assume necessary for a large-scale reform progi'cim. We show theoretically how direct cincl indirect taxes may lead to the actual reform duration cind costs be under estimated by the labour class. Factors such as tax-shifting and access to financial adaptation were deterministic in our claims. Using Turkish time series data for public wages and salaries, we try to show tax-shifting empirically by estimating a real wage determination equation. Partial evidence for tax-shifting in real public salaries was found. A simple recapitulative model establishing the link with the results derived by the related literature wcis postulated.