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Decentralization, economic development, and growth in Turkish provinces

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  • Tosun, Mehmet Serkan
  • Yilmaz, Serdar

Abstract

There have been important developments in the decentralization of the government structure in Turkey since the early 1980s. This paper examines economic development and growth in Turkish provinces. Although there is a rich literature on the economic effects of government decentralization from both developed and developing countries, these effects have not been examined widely in the context of Turkish local governments. The authors first describe changes since the early 1980s and recent reform efforts. They then provide an empirical analysis of the effects of decentralization in Turkish provinces using cross-sectional and panel data approaches. The panel dataset consists of 67 provinces from 1976 to 2001. The analysis examines whether variations in local decentralization across these provinces and across time have had a significant impact on economic development and growth in those provinces. The findings suggest a weak negative economic effect of decentralization through a number of municipalities per capita. However, the findings do not show any significant impact from the creation of new provinces by separation from the existing ones.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4725.

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Date of creation: 01 Sep 2008
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Handle: RePEc:wbk:wbrwps:4725

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Keywords: Municipal Financial Management; Economic Theory&Research; Regional Governance; Intergovernmental Fiscal Relations and Local Finance Management; Public Sector Management and Reform;

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  1. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 26(1), pages 77-104, February.
  2. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, Elsevier, vol. 28(2), pages 365-380, February.
  3. Neyapti, Bilin, 2006. "Revenue decentralization and income distribution," Economics Letters, Elsevier, Elsevier, vol. 92(3), pages 409-416, September.
  4. Zax, Jeffrey S, 1989. "Is There a Leviathan in Your Neighborhood?," American Economic Review, American Economic Association, American Economic Association, vol. 79(3), pages 560-67, June.
  5. Hamid Davoodi & Heng-fu Zou, 1996. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 98, China Economics and Management Academy, Central University of Finance and Economics.
  6. George Hammond & Mehmet S. Tosun, 2006. "Local Decentralization and Economic Growth: Evidence from U.S. Metropolitan and Non-Metropolitan Regions," Working Papers, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics 06-002, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics.
  7. Jorge Martinez-Vazquez & Robert McNab, 2001. "Fiscal Decentralization and Economic Growth," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0101, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  8. Xie, Danyang & Zou, Heng-fu & Davoodi, Hamid, 1999. "Fiscal Decentralization and Economic Growth in the United States," Journal of Urban Economics, Elsevier, vol. 45(2), pages 228-239, March.
  9. Akai, Nobuo & Sakata, Masayo, 2002. "Fiscal decentralization contributes to economic growth: evidence from state-level cross-section data for the United States," Journal of Urban Economics, Elsevier, vol. 52(1), pages 93-108, July.
  10. Pranab Bardhan & Dilip Mookherjee (ed.), 2006. "Decentralization and Local Governance in Developing Countries: A Comparative Perspective," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262524546, December.
  11. Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, American Economic Association, vol. 75(4), pages 748-57, September.
  12. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
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