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

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  • Isa Sagbas
  • Huseyin Sen
  • Muhsin Kar

    (Department of Economics, Sutcu Imam University, Kahramanmaras, Turkey)

Abstract

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.

Suggested Citation

  • Isa Sagbas & Huseyin Sen & Muhsin Kar, 2005. "Fiscal Decentralisation, the Size of the Public Sector, and Economic Growth in Turkey," Environment and Planning C, , vol. 23(1), pages 3-19, February.
    • Handle: RePEc:sae:envirc:v:23:y:2005:i:1:p:3-19
    DOI: 10.1068/c0421
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    References listed on IDEAS

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    Cited by:

    1. Luca Agnello & Vítor Castro & Ricardo M Sousa, 2015. "Is fiscal fatigue a threat to consolidation programmes?," Environment and Planning C, , vol. 33(4), pages 765-779, August.
    2. David Cantarero & Patricio Perez, 2012. "Decentralization and regional government size in Spain," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 11(3), pages 211-237, December.

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