Regional convergence in Turkey: the role of government in economic environment augmenting activities
Regional disparities are important concerns for the researchers as well as the policy makers in both developed and developing countries. The government, as a leading actor in regional policies, can create externalities through investments not only in the real sectors, but also in infrastructure and institutions. Investments in education, health and transportation enhance the quality of life and business environment, and trigger the development in those regions. The paper defines this type of government role in a particular region as “economic environment augmenting activities of the government”. The paper focuses on two types of initiatives of the government: regional universities and the existence of an airport. The main findings show that spending impact suppresses knowledge impact in the low income provinces. And, there is a threshold for the regional income level: The demand effect of government initiatives as state university and providing air transport has greater impact in low-income provinces, particularly before 2000.
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