Fiscal decentralisation, the size of the public sector, and economic growth in Turkey

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Sagbas I., Sen H. , Kar M.

Environment and Planning C: Government and Policy, vol.23, no.1, pp.3-19, 2005 (Journal Indexed in SCI Expanded) identifier

  • Publication Type: Article / Article
  • Volume: 23 Issue: 1
  • Publication Date: 2005
  • Doi Number: 10.1068/c0421
  • Title of Journal : Environment and Planning C: Government and Policy
  • Page Numbers: pp.3-19


The aim of this study is to examine the impact of fiscal decentralisation on the size of the public sector and economic growth in Turkey. An empirical test of the Leviathan hypothesis by using recently developed econometrical tools shows that fiscal decentralisation does not curb the growth of central government. The finding is not compatible with explanations of the efficiency benefits of greater decentralisation. An investigation of the impacts of fiscal decentralisation on economic growth by utilising time series in a framework of the production function for the period 1982-2000 and cross-section analyses on sixty-seven provinces indicates that there is a negative relationship between fiscal decentralisation and economic growth.