Fiscal Decentralisation, the Size of the Public Sector, and Economic Growth in Turkey | Zendy

İsa Sağbaş | Zendy; Hüseyin Şen | Zendy; Muhsin Kar | Zendy

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Fiscal Decentralisation, the Size of the Public Sector, and Economic Growth in Turkey

Author(s) -

İsa Sağbaş,

Hüseyin Şen,

Muhsin Kar

Publication year - 2005

Publication title -

environment and planning c government and policy

Language(s) - English

Resource type - Journals

eISSN - 1472-3425

pISSN - 0263-774X

DOI - 10.1068/c0421

Subject(s) - decentralization , economics , public sector , government (linguistics) , fiscal union , economic policy , fiscal federalism , fiscal policy , macroeconomics , development economics , economic system , economy , market economy , linguistics , philosophy

The aim of this study is to examine the impact of fiscal decentralisation on the size of the public sector and economic growth in Turkey. An empirical test of the Leviathan hypothesis by using recently developed econometrical tools shows that fiscal decentralisation does not curb the growth of central government. The finding is not compatible with explanations of the efficiency benefits of greater decentralisation. An investigation of the impacts of fiscal decentralisation on economic growth by utilising time series in a framework of the production function for the period 1982–2000 and cross-section analyses on sixty-seven provinces indicates that there is a negative relationship between fiscal decentralisation and economic growth.

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