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Decentralization, Economic Development, and Growth in Turkish Provinces

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  • Mehmet Serkan Tosun
  • Serdar Yilmaz

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. It first discusses local government reforms throughout the history of Turkey with the focus on recent reform efforts. It then empirically analyzes the effects of recent decentralization reforms in Turkish provinces using cross-sectional and panel data approaches as well as spatial econometrics. The panel data set consists of sixty-seven provinces from 1976 to 2001. Using the number of local governments per capita and number of local governments per square kilometer of land to indicate decentralization, the analysis examines whether variations in local decentralization across these provinces and across time have significantly affected 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 effect from the creation of new provinces by separation from the existing ones.

Suggested Citation

  • Mehmet Serkan Tosun & Serdar Yilmaz, 2010. "Decentralization, Economic Development, and Growth in Turkish Provinces," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(4), pages 71-91, January.
    • Handle: RePEc:mes:emfitr:v:46:y:2010:i:4:p:71-91
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    2. Tristan Canare, 2021. "Decentralization and welfare: theory and an empirical analysis using Philippine data," Public Sector Economics, Institute of Public Finance, vol. 45(1), pages 93-123.
    3. Yushkov, Andrey, 2015. "Fiscal decentralization and regional economic growth: Theory, empirics, and the Russian experience," Russian Journal of Economics, Elsevier, vol. 1(4), pages 404-418.

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