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An Empirical Analysis on the Relationship between Public Sector Size and Economic Growth in Turkey

Ömer Faruk ALTUNÇ, Celil AYDIN.

Abstract
Armey Curve, propounded by Richard Armey, is one of the tools that developed to demonstrate the role of the state in the economic process. The basic logic behind the Armey Curve is that the relationship between public spending and gross domestic product (GDP) is positive up to a certain point, thereafter the relationship becomes negative. According to Friedman (1997), the government has an important role in a free and open society. It is emphasized that, average contribution of the public sector in the economy is positive, but as the public share of national income increases from 15% to 50% the marginal contribution of the public sector will be negative. Therefore, Friedman advocates that based on development level of countries, the optimal level of public spending should be between 15% and 50%. In this article, Friedman’s hypothesis is tested for Turkish economy using the data of the period 1975-2010 by the help of econometric timeseries analysis, and Armey Curve is evaluated whether it is valid for total public expenditure and expenditure components or not. Empirical findings confirmed that there is a relationship as "inverse U" between economic growth and other expenditure components except public investment expenditure. Moreover, the optimal level of total public expenditure for Turkish economy is calculated as 16% of GDP. This ratio is below the level of 26.6% which is the ratio of 2010 public expenditure to GDP. In this case, one of the macroeconomic policy proposals can be the reduction of the public expenditures in Turkish economy.

Key words: Public Sector, Armey Curve, Friedman\'s Hypothesis, Co-integration. JEL Classification: C10, C51, H50, O40.



TÜRKİYE'DE KAMU SEKTÖRÜ BÜYÜKLÜĞÜ VE EKONOMİK BÜYÜME İLİŞKİSİNİN AMPİRİK ANALİZİ

Özet
Richard Armey tarafından ortaya atılan Armey Eğrisi devletin ekonomik süreçteki rolünü ortaya koymak için geliştirilen araçlardan biridir. Armey eğrisi kamu harcamalarıyla Gayrisafi yurtiçi hasıla (GSYH) arasında bir noktaya kadar pozitif, bir noktadan sonra negatif ilişki oluğu şeklindeki temel mantığı yansıtmaktadır. Friedman’a (1997) göre özgür ve açık bir toplumda devlet önemli bir role sahiptir. Kamu sektörünün ekonomiye ortalama katkısının pozitif olduğu, ancak bu payın ulusal gelirin %15’inden %50’sine gidildikçe marjinal katkısının negatif olacağını vurgulamaktadır. Dolayısıyla Friedman kamu harcamalarının optimal düzeyinin, ülkelerin gelişmişlik düzeylerine göre, GSYH’nın %15 ile %50’si arasında olması gerektiğini savunmaktadır. Çalışmada bu hipotez 1975-2010 dönemi verilerinden hareketle ve ekonometrik zaman serileri analizinden yararlanarak Türkiye ekonomisi için test edilmiş ve toplam kamu harcamaları ve harcama kategorileri için Armey eğrisinin geçerli olup olmadığına bakılmıştır. Ampirik bulgular kamu yatırım harcamaları dışında diğer harcama kategorileri ve ekonomik büyüme arasında “ters U” biçiminde bir ilişkinin olduğunu doğrulamıştır. Ayrıca Türkiye ekonomisi için toplam kamu harcamalarının optimal düzeyi, GSYH’nın %16’sı düzeyinde hesaplanmıştır. Bu oran Türkiye ekonomisi için 2010 yılı kamu harcamalarının/GSYH’ya oranı olan %26.6 düzeyinin altındadır. Bu durumda sunulabilecek makroekonomik politika önerilerinden biri Türkiye’de kamu harcamalarının azaltılması gereğidir.

Anahtar Kelimeler: Kamu sektörü, Armey eğrisi, Friedman hipotezi, Eş-bütünleşme. JEL Sınıflaması: C10, C51, H50, O40.


 
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