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Creative accounting practices and measurement methods: Evidence from Turkey

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  • Ozkaya, Ata

Abstract

A fiscal rule imposed when the budget is not transparent yields more creative accounting to circumvent it and less fiscal adjustment, generating hidden deficits/debts in public sector. This study focuses on creative accounting practices of governments and adds to the literature by measuring hidden debts of the Turkish public sector ranging from the period 1989 to 2010. The author shows that the IMF has been misinformed, indeed has been misled by the Turkish authorities regarding the magnitude of public debt stock in the late 90's. The lacking information deteriorated the IMF's forecasts, which might be one of the main reasons for the failure of the IMF's planned fiscal consolidation at the outset of 2000 - 2001 crisis. The author's methodology can easily be adapted to any other country in order to identify the different margins on which governments can cheat and manipulate the Government Finance Statistics.

Suggested Citation

  • Ozkaya, Ata, 2014. "Creative accounting practices and measurement methods: Evidence from Turkey," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-27.
    • Handle: RePEc:zbw:ifweej:201429
    DOI: 10.5018/economics-ejournal.ja.2014-29
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    1. Roman Blazek & Pavol Durana & Jakub Michulek, 2023. "Renaissance of Creative Accounting Due to the Pandemic: New Patterns Explored by Correspondence Analysis," Stats, MDPI, vol. 6(1), pages 1-20, March.

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    More about this item

    Keywords

    fiscal rules; creative accounting; contingent liabilities; hidden public debt; IMF policies;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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