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External Debt, Defence Expenditures And Political Business Cycles In Turkey

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  • Erdal Karagol
  • Aziz Turhan

Abstract

This paper investigates the relationship between external debt, defence expenditures and political business cycles in Turkey for 1960-2002. Here, two important aspects of the political business cycle, the electoral effects and the partisan effects, were investigated. The empirical finding of impulse response functions of defence expenditures to a shock in the partisan effect is positive. The results reported here indicate that political colours of parties appear to be important. This suggests that defence expenditure is influenced by political ideology and the fiscal policy of governments after elections. Moreover, the impulse response functions of external debt stock to shocks to the electoral effects and the response of external debt stock shocks to the partisan effects increased over the whole period.

Suggested Citation

  • Erdal Karagol & Aziz Turhan, 2008. "External Debt, Defence Expenditures And Political Business Cycles In Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(3), pages 217-224.
    • Handle: RePEc:taf:defpea:v:19:y:2008:i:3:p:217-224
    DOI: 10.1080/10242690801972170
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    References listed on IDEAS

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    1. Christos Kollias † & George Manolas & Suzanna-Maria Paleologouc, 2004. "Military expenditure and government debt in greece: Some preliminary empirical findings," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 189-197, April.
    2. Erdal Karagol, 2005. "Defence expenditures and external debt in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(2), pages 117-125.
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    5. Castro, Vitor & Veiga, Francisco Jose, 2004. "Political business cycles and inflation stabilization," Economics Letters, Elsevier, vol. 83(1), pages 1-6, April.
    6. Selami Sezgin, 2004. "An empirical note on external debt and defence expenditures in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 199-203, April.
    7. Allen, Stuart D, 1986. "The Federal Reserve and the Electoral Cycle: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 88-94, February.
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    Cited by:

    1. Kiryl V. Rudy, 2021. "Political tax cycles: Cyclicality of the tax burden in election periods," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 7(2), pages 193-205.
    2. Bove, Vincenzo & Efthyvoulou, Georgios & Navas, Antonio, 2017. "Political cycles in public expenditure: butter vs guns," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 582-604.
    3. Björn Kauder & Niklas Potrafke & Simone Winterer, 2015. "Das Wachstum der Verteidigungsausgaben in Deutschland (1951–2011): Welchen Einfluss haben die Parteien?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(10), pages 19-26, May.
    4. Gitana Dudzevičiūtė & Vida Česnuitytė & Dalia Prakapienė, 2021. "Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries," Sustainability, MDPI, vol. 13(12), pages 1-18, June.
    5. Buts Caroline & Bois Cind Du & Raes Steffi, 2017. "Political Cycles in Military Deployment," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 23(4), pages 1-7, December.
    6. Pempetzoglou Maria, 2021. "A Literature Survey on Defense Expenditures – External Debt Nexus," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 27(1), pages 119-141, February.
    7. Olejnik, Łukasz Wiktor, 2024. "Left-wing butter vs. right-wing guns: Government ideology and disaggregated military expenditures," ZEW Discussion Papers 24-026, ZEW - Leibniz Centre for European Economic Research.

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