Public Expenditure and Political Business Cycles inTurkey

Public Expenditure and Political Business Cycles inTurkey

TARI, Recep
ÖZKAN, Filiz

According to the theory of ―Political Business Cycles (PBC)‖, politicians prefer to pursue opportunistic policies in order to increase their chance of election. For this reason, they apply expansionary policies before the elections. Hence, they start to do this by increasing public expenditures. There is an increase in the indicators of money parallel to the increase in public expenditures. In this study it is examined that whether there have been appropriate developments in terms of PBC theory during the elections of six congressmen in the period after 1980. In order to determine the effect of PBC ―the traditional opportunistic model‖ from Nordhaus is used to test the PBC effect. ―The opportunistic model‖ from Nordhaus is tested through the autoregressive analysis method which is used by Alesina, Cohen and Roubini (1991,1992) in their studies for the OECD countries and industrial countries. The results obtained as a result of the empirical analysis support the PBC theory.

Conference or Workshop Item
PeerReviewed

2010-06

249