Reforming public debt governance in Turkey to reach debt sustainability

Date
2022-07-23
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Source Title
Journal of Policy Modeling
Print ISSN
0161-8938
Electronic ISSN
1873-8060
Publisher
Elsevier Inc.
Volume
44
Issue
Pages
1057 - 1076
Language
English
Type
Article
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Abstract

The paper argues that the achievement of sustainability of public debt requiring the fulfillment of solvency and liquidity conditions in countries for which real interest rates are above the real growth rates is challenging and difficult. Since solvency is a rather complex concept and its governance is difficult and delicate, the paper maintains that such countries could try to achieve the sustainability of public debt by delegating the tasks of securing the observance of solvency and liquidity conditions to fiscal councils (FC) that need to be formed as autonomous public institutions with sufficient financial and technical resources. In Turkey FC needs to be assigned the further task of improving policymakers’ incentives to opt for sound government procurement and taxation policies that would lead to the achievement of efficient allocation of resources and elimination of corruption and nepotism in the economy.

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Keywords
Public debt, Sustainability, Turkey
Citation
Published Version (Please cite this version)