Research Article


DOI :10.26650/siyasal.2020.29.2.0048   IUP :10.26650/siyasal.2020.29.2.0048    Full Text (PDF)

The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis

Zeynep Burcu Bulut Çevik

This study tests whether intergovernmental transfers affect the income per capita of Turkey with panel data analysis for the period of 2010 to 2017 including the cities of Turkey. The Hausman test gives supporting results about using the fixed effects model. According to the fixed effects model results, when the transfers increase by 1%, income increases by 0.04% two periods later with the inclusion of control variables. The possible reasons for the significant but small impact of transfers on income are three-fold: i) the intergovernmental transfers may not be used efficiently, ii) municipalities may not update the resource allocation successfully with the increasing urbanization rate, iii) the increase in the number of immigrants may prevent the positive effect of transfers on income through labor market channels. Furthermore, the effects of transfers on income differentiate with respect to being a metropolitan municipality or not.

JEL Classification : H77 , H23 , C33
DOI :10.26650/siyasal.2020.29.2.0048   IUP :10.26650/siyasal.2020.29.2.0048    Full Text (PDF)

Türkiye’de Yönetimler Arası Transferlerin Kişi Başı Gelir Üzerindeki Etkisi: Panel Veri Analizi

Zeynep Burcu Bulut Çevik

Bu çalışmada merkezi yönetimden yerel yönetimlere gönderilen yönetimler arası transferlerin, kişi başı gelir üzerine etkisi olup olmadığı test edilmiştir. 2010 ile 2017 yılları arasındaki şehir bazlı panel veri analizi yöntemi olarak sabit ekili model kullanılmış, Hausman testi sonuçları da söz konusu model yöntemini destekleyici sonuçlar vermiştir. Bu model sonuçlarına göre, Türkiye’de kişi başı geliri etkileyen diğer faktörler kontrol edildikten sonra, bu dönem transfer miktarındaki %1’lik artışın, iki dönem sonra kişi başı geliri %0.04 arttırdığı gözlenmiştir. Etki şiddetinin anlamlı fakat düşük olması üç şekilde açıklanabilir: i) Transferlerin harcama kanalında yeterince etkili ve etkin kullanılmaması, ii) Türkiye’de hızla artan kentleşmeye rağmen, il belediyelerin kaynak dağıtımını aynı hızda düzenleyememesi, iii) Son yıllarda artan göçmen sayısının transferlerin işgücü piyasasına yapabileceği olası pozitif etkiyi engellemesi. Ayrıca, büyükşehir belediyesi olan iller ile büyükşehir olmayan belediyelere verilen transferlerin gelirlere etkisinin farklılaştığı sonucuna ulaşılmıştır. 

JEL Classification : H77 , H23 , C33

EXTENDED ABSTRACT


Intergovernmental transfers, which aim to reduce the fiscal imbalances between regions as well as to annihilate the local externalities, do not only affect the local economy but also influence the whole economy. They may affect the per capita income through different channels such as i) effect on labor market, ii) effect on human capital, iii) effect on growth and inequality. Firstly, intergovernmental transfers may increase local investment, which may influence the labor market positively. This positive influence may increase the per capita income level. Secondly, the transfers, spent on cultural and art activities, will have a positive impact on human capital, which will ultimately enhance the overall GDP level. Through this way, per capita income level will increase. Lastly, the inequality reducing and growth enhancing effects of transfers will affect the per capita income positively.

The literature about intergovernmental transfers is mainly focused on the law amendments and their possible effects by either discussions or by descriptive statistics. The econometric studies, which use municipality based data, are limited because of data availability issues. Especially since 2014, when a new law (Law No. 6360) was implemented, Turkish municipality-based data related to transfers has not been released publicly anymore. Due to this reason, the data related to municipality based transfers is calculated by utilizing Law No. 5779 and Law No. 6360. Other contribution of this study is that as far as I know, there is no other study which investigates the effect of transfers on income level for Turkey.

This study attempts to find out the effect of intergovernmental transfers on per capita income level between 2010 to 2017 for Turkey. The amount of municipality-based transfers is calculated via Law No. 5779 for the period of January 2010 to March 2014, whereas for the period of April 2014 till December 2017, Law No. 6360 is utilized. The amount of transfers is calculated not only city by city but also on a district basis since District Municipalities in Metropolitan areas distribute some of their portion to Metropolitan Municipalities.

In this study, the fixed effects model is preferred in panel data analysis, since the 81 cities of Turkey have different economic, spatial or sociological structures. The results of the Hausman test support this choice of model. In order to see the pure effect of transfers on income level, certain control variables are used. These control variables are trade share as a percent of GDP, inflation rate of CPI and population. They are chosen according to data availability as well as their possible significant effect on income level. Since the income level can be represented by GDP level, per capita GDP is used to represent the per capita income level as a dependent variable.

According to the fixed effect model results, the intergovernmental transfers affect the per capita income level significantly but with a small coefficient of 2-lag time. When the intergovernmental transfers as a percent of GDP in this period increases by 1%; two periods later, the per capita income level increases by 0.04%. This small and lag effect result shows the existence of obstruction in some channels of transfers to investments and labor market. Especially after 2011, the rise in the number of Syrian refugees may prevent the effect of transfers on the labor market. In addition, the resources of municipalities may not be distributed appropriately for the new local needs as the pace of urbanization rate increases in Turkey. Moreover, the low share of local expenditure over GDP may cause this small effect.

Furthermore, the effect of transfers on income level is distinguished according to the type of municipality: metropolitan or non-metropolitan. In non-metropolitan municipalities, the effect is significant but negative, whereas in metropolitan municipalities, it is small, significant but positive. This high differentiation shows the sharp distinction in local expenditures or resource allocation between metropolitan and non-metropolitan municipalities. Especially, the negative sign points out the possible existence of a moral hazard problem in non-metropolitan municipalities.


PDF View

References

  • Agun, B. H. ve Güler, M. (2017). “Büyükşehir Belediyelerinin Gelir Yapılarının Değerlendirilmesi: 2006- 2015”, Yüzüncü Yıl Üniversitesi SBE Dergisi, 1(4), 1-17. google scholar
  • Akin, Z., Bulut-Cevik, Zeynep B., Neyapti, B. (2016). Does Fiscal Decentralization Promote Fiscal Discipline? Emerging Markets, Finance and Trade, 52(3), 690-705. google scholar
  • Alm, J., & Martinez-Vazquez, J. (2015). Re-designing Equalization Transfers: An Application to South Africa ́s Provincial Equitable Share. Journal of Developing Areas, 49(1), 1-22. google scholar
  • Arıkboğa, Ü. (2015). Türkiye’de Büyüksehir Belediyesi Transfer Sistemi ve 6360 Sayılı Kanunun Etkileri. Marmara Üniversitesi, İ.İ.B.F. Dergisi, 37(2), 1-39. google scholar
  • Arıkboğa, Ü. (2016). Türkiye’de Belediyelerin Gelir Yapısı: Sorunlar ve Çözüm Önerileri. Mustafa Kemal Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 13(33), 276-297. google scholar
  • Asterious, D. (2006), Applied econometrics: a modern approach using Eviews and Microfit, Palgrave Macmillan. google scholar
  • Baltagi, B. H. (2005), Econometric Analysis of Panel Data. 3rd ed. New York: Wiley. google scholar
  • Barro, R. J. (2003). Determinants of Economic Growth in a Panel of Countries. Annals of Economics and Finance, 4, 231-274. google scholar
  • Becker, S. O., Egger, P. H., & von Ehrlich, M. (2012). Too Much of a Good thing? On the Growth Effects of the EU’s Regional Policy. European Economic Review, 56, 648-668. google scholar
  • Bergstrom, P., Dahlberg, M., & Mork, E. (2004). The Effects of Grants and Wages on Municipal Labour Demand. Labour Economics, 11, 315-334. google scholar
  • Betson, D., & Haveman, R. (1984). The Role of Income Transfers in Reducing Inequality between and within Regions. (Ed. Marilyn Moon) Economic Transfers in the United States, NBER: 283-326. google scholar
  • Biricikoglu, H. ve Yalnizoglu, Y. (2018). 360 Sayılı Kanun’un Etki̇nli̇k-Veri̇mli̇lik
İle Hizmette Yerellik İlkeleri̇ Açısından Değerlendirilmesi̇: Kocaeli̇ İlçesinde Yapılan Bi̇r Araştırma. Yönetim Bilimleri Dergisi, 16(32), 255-284. google scholar
  • Boarini, R., Johansson, A., & d’Ercole, M. M. (2006). Alternative Measures of Well-Being. OECD Social, Employment and Migration Working Paper No: 33. google scholar
  • Breitung, J. (2000). The Local Power of some Unit Root Tests for Panel Data. (Ed. Baltagi B.H.) Nonstationary Panels, Panel Cointegration, and Dynamic Panels, 161-177, Elsevier, Amsterdam. google scholar
  • Brennan G., & Buchanan, J. (1980), The Power to Tax. Analytical Foundations of a Fiscal Constitution, Cambridge University Press, Cambridge. google scholar
  • Bulut-Cevik, Z. B. (2020). Implications of Administrative Reform in the Context of Intergovernmental Fiscal Relations. (Eds. Tekin Akdemir and Halis Kiral) Public Financial Management Reforms in Turkey; Progress and Challenges, Volume: 2 Chapter 7:105-119, Springer. google scholar
  • Ceyhan, S. ve Tekkanat, S. S. (2018). 6360 Sayılı Kanun ve Ankara İline Etkileri” Bitlis Eren Üniversitesi Akademik İzdüşüm Dergisi, 3(2), 20-42. google scholar
  • Çalcalı, O. (2018). Yönetimler Arasi Transferlerin Yerel Vergileme Gayreti Üzerine Etkisi: Dou Karadeniz Bölge Belediyeleri Üzerine Bir Uygulama. Maliye Dergisi, 174, 455-483. google scholar
  • Dağ, M. ve Kılınç, F. (2017). 6360 Sayılı Kanun Sonrası Büyükşehir Belediyeleri Açısından Mali Özerkliğin Değerlendirilmesi. Bitlis Eren Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 6, 426-443. google scholar
  • Dahlby, B., & Wilson, L. (1994), “Fiscal Capacity, Tax Effort, and Optimal Equalization Grants” Canadian Journal of Economics, 337, 657–672. google scholar
  • De Gregorio, J. (1992). The Effect of Inflation on Economic Growth. European Economic Review, 36, 417–424. google scholar
  • Driscoll, J. C., & Kraay, Aart C. Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data” The Review of Economics and Statistics, 80(4), 549-560. google scholar
  • Ederveen, S., Groot, H. L.F., & Nahuis, R. (2002). Fertile Soil for Structural Funds?: A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy. CPB Discussion Paper, No: 10. google scholar
  • Ehrenberg, R. G. (1973). The Demand for State and Local Government Employees. American Economic Review, 63, 366–379. google scholar
  • Ehrenberg, R. G., & Schwarz, J. L. (1986). Public-Sector Labor Markets, Handbook of Labor Economics. Elsevier, New York.
 google scholar
  • Garcia-Mila, T., & McGurie, T. J. (2001). Do interregional transfers improve the economic performance of poor regions? the case of Spain” International Tax and Public Finance, 8(3), 281-295. google scholar
  • Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. Econometrics Journal, 3, 148–161. google scholar
  • Harris, R. D. F., & Tzavalis, E. (1999). Inference for Unit Roots in Dynamic Panels Where the Time Dimension is Fixed. Journal of Econometrics, 90, 1–44. google scholar
  • Hausman, J. A. (1978), Specification Tests in Econometrics. Econometrica: Journal of the Econometric Society, 46(6), 1251-1271. google scholar
  • Hlouskova, J., & Wagner, M. (2006). The Performance of Panel Unit Root and Stationarity Tests: Results from a Large Scale Simulation Study” Econometric Reviews, 25, 85–116. google scholar
  • Ho, C. H. (2004). Determinants of Foreign Direct Investment in China. 16th Annual Conference of the Association for Chinese Economics Studies, Australia (ACESA), Brisbane, QLD, 19- 20 July 2004. google scholar
  • Hoch, I. (1972). Income and City Size. Urban Studies, 9(3), 299–328. google scholar
  • Horos, R. E. D., & Sarafidis, V. (2006). Testing for Cross-Sectional Dependence in Panel-Data Models” The Stata Journal, 6(4), 482-496. google scholar
  • Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115, 53–74. google scholar
  • Kanca, O. C. (2012). Türkiye’de Transfer Harcamalarının Salınımı ve Politik Gelişmeler. SİYASAL: Journal of Political Sciences (İ.Ü. Siyasal Bilgiler Fakültesi Dergisi), 46, 25-59. google scholar
  • Karaarslan, M. (2013). Nasıl Bir Yerel Yönetim? 6360 Sayılı Kanun Üzerine Bir Değerlendirme. Dicle Üniversitesi Hukuk Fakültesi Dergisi, 17(26-29), 123-162. google scholar
  • Kaufman, M. Swagel, P., & Dunaway, S. (2003). Regional Convergence and the Role of Federal Transfers in Canada. IMF Working Papers No:97. google scholar
  • Kennedy, P. (2008). A Guide to Econometrics, Blackwell Publishing. google scholar
  • Kesik, A. (2005). Yöneti̇mler Arasi Mali̇ İli̇şki̇ler Ve Türki̇ye Uygulaması. Selçuk Üniversitesi İİBF Sosyal ve Ekonomik Araştırmalar Dergisi. google scholar
  • Levin, A., Lin, C.F., & Chu, C. S. J. (2002). Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties. Journal of Econometrics, 108, 1–22. google scholar
  • Limoneiro, D. (2015). Beyond Income Transfers: The Decline of Regional Inequality in Brazil During the 2000s. Progress in Development Studies, 15(1), 6- 21. google scholar
  • Lundqvist, Helene; Dahlberg, Matz; Mörk, Eva (2010), “Stimulating Local Public Employment: Do General Grants Work?”, IZA Discussion Papers, No. 5177. google scholar
  • Ma, J. (1997). Intergovernmental Fiscal Transfers in Nine Countries” Macroeconomic Management and Policy Division, Economic Development Institute, The World Bank. google scholar
  • Markusen, A. R., Saxenian, A., Weiss, M. A. (1981). Who Benefits from Intergovernmental Transfers? Publius, 11(1), 5-35. google scholar
  • Martinez-Vazquez, J., &Sepulveda, C. (2011). Intergovernmental Transfers in Latin America: A Policy Reform Perspective. International Center for Public Policy Working Paper Series, GSUpaper1108. google scholar
  • McKinnon, R., (1997). Market-preserving fiscal federalism in the American monetary union. (Eds. Blejer M. and Ter-Minassian T.) Macroeconomic Dimensions of Public Finance: Essays in honour of Vito Tanzi, Routledge, London :73-93. google scholar
  • Muinelo-Gallo, L., Rodríguez-Miranda, A., & Castro-Scavone, P. (2016). Intergovernmental Transfers and Regional Income Inequalities: An Empirical Analysis of Uruguay. Hacienda Pública Española, IEF, 219(4), 9-34. google scholar
  • Oktay, T. (2016), 6360 Sayılı Kanuna Dayalı Büyükşehir Beledi̇ye Reformunu Anlama Ve Anlamlandırma. Siyasal Bilgiler Fakültesi Dergisi (İSMUS), 1, 71-131. google scholar
  • Oates, W. E. (1972), Fiscal federalism, Harcourt-Brace, New York, 5. google scholar
  • Özer, M. A. (2013). Yerel Yönetı̇mler Reformunda Reform: 6360 Sayılı Kanun’un Düşündürdüklerı̇. Yerel Politikalar, 97-126. google scholar
  • Pesaran, M. H. (2004), “General diagnostic tests for cross section dependence in panels” University of Cambridge, Cambridge Working Papers in Economics No. 0435. google scholar
  • Qian, Y., & Weingast, B. (1997). Federalism as a commitment to preserving market incentives. Journal of Economic Perspectives, 11, 83-92. google scholar
  • Rodriguez-Pose A., Ezcurra, R. (2010). Does decentralization matter for regional disparities? A cross-country analysis. Journal of Economic Geography, 10, 619-644. google scholar
  • Saarinen, J. (2003). The Regional Economics of Tourism in Northern Finland: The Socio-economic Implications
of Recent Tourism Development and Future Possibilities for Regional Development. Scandinavian Journal of Hospitality and Tourism, 3(2), 91-113. Sarel, M. (1996). Nonlinear effects of inflation on economic growth” IMF Staff Papers. 43, 199–215. google scholar
  • Shah, A. (2006). A Practitioner's Guide to Intergovernmental Fiscal Transfers. Revista de Economía y Estadística, CuartaÉpoca, 44(2), 127-186. Stockman, A. C. (1981). Anticipated Inflation and the Capital Stock in a Cash-in-Advance Economy” Journal of Monetary Economics, 8, 387–393. google scholar
  • Şahin-İpek, E. A. (2018). Türkiye’de belediye gelirlerinin değerlendirilmesi. Afyon Kocatepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Aralık 2018, 20(2), 1-19. google scholar
  • Topçu, Dilek (2017), “6360 Sayılı Kanun Ölçeğinde Elektronik Erişimin Yerel Katılıma Etkisi” Yüzüncü Yıl Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, Özel Sayı, 4(1),1-17. google scholar
  • Türkoğlu, İ. (2012), “Belediye Gelirleri ve Yeni Bir Gelir Kaynağı Olarak Şehirleşme Rantı”, Elektronik Sosyal Bilimler Dergisi, 11(40), 293-305. google scholar
  • Ulusoy, A. ve Akdemir, T. (2009). Yönetimler Arası Transferler: Teori ve Türkiye Uygulaması. (Ed. N. Falay, A. Kesik & M. Çak) Türkiye’de Yerel Yönetimlerin Sorunları ve Geleceği. Seçkin Yayıncılık. 113-141. google scholar
  • Ulusoy, A. ve Akdemir, T. (2019). Mahalli Idareler, Seçkin Yayıncılık google scholar
  • Vaillancourt, F., & Rault, S. (2008). The Regional Dimensions of Federal Intergovernmental and Interpersonal Transfers in Canada, 1981–2001. Regional & Federal Studies, 13(4), 130-152 . google scholar
  • Weingast B. (1995). The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development. Journal of Law, Economics, and Organization 11, 1-31. google scholar
  • Woolridge, J. M. (2012). Introductory Econometrics: A Modern Approach. Thomson/South-Western, Cengage Learning, 5th edition google scholar
  • Yılmaz, V. ve Kaypak, Ş. (2017). 6360 Sayılı Yasa ile Getirilen Yeniliklerin Yerel Halk Üzerindeki Etkililiğinin Ölçülmesi: Malatya Büyükşehir Belediyesi Örnegi. International Journal of Academic Value Studies, 3(15), 405-418. google scholar
  • Yilmaz, S. (2003). Intergovernmental transfers: Concepts and Policy Issues. Joint Conference of World Bank Institute and Korea Development Institute, Seoul, Korea. google scholar
  • Yüksel, F. (2003). Belediye Gelirlerinde Yetersizlikler ve Alternatif Çözüm Önerileri. SÜ İİBF Sosyal ve Ekonomik Araştırmalar Dergisi, 6, 49-60. google scholar
  • Yüksel, C. (2016). Yerel Yöneti̇mlerde Kaynak Paylaşim Si̇stemleri̇ ve 6360 Sayılı Kanun’la Türki̇ye’deki̇ Deği̇şi̇mler. Ankara Universitesi SBF Dergisi, 71(3), 731-756. google scholar
  • 6360 sayılı On Dört İlde Büyükşehir Belediyesi ve Yirmi Yedi İlçe Kurulması ile Bazı Kanun ve Kanun Hükmünde Kararnamelerde Değişiklik Yapılmasına Dair Kanun. google scholar
  • 5779 sayılı İl Özel İdarelerine ve Belediyelere Genel Bütçe Vergi Gelirlerinden Pay Verilmesi Hakkında Kanun. google scholar
  • 2560 sayılı İstanbul Su ve Kanalizasyon İdaresi Genel Müdürlüğü Kuruluş ve Görevleri Hakkında Kanun google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Bulut Çevik, Z.B. (2020). The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis. Siyasal: Journal of Political Sciences, 29(2), 313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048


AMA

Bulut Çevik Z B. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis. Siyasal: Journal of Political Sciences. 2020;29(2):313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048


ABNT

Bulut Çevik, Z.B. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis. Siyasal: Journal of Political Sciences, [Publisher Location], v. 29, n. 2, p. 313-335, 2020.


Chicago: Author-Date Style

Bulut Çevik, Zeynep Burcu,. 2020. “The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis.” Siyasal: Journal of Political Sciences 29, no. 2: 313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048


Chicago: Humanities Style

Bulut Çevik, Zeynep Burcu,. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis.” Siyasal: Journal of Political Sciences 29, no. 2 (Apr. 2024): 313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048


Harvard: Australian Style

Bulut Çevik, ZB 2020, 'The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis', Siyasal: Journal of Political Sciences, vol. 29, no. 2, pp. 313-335, viewed 25 Apr. 2024, https://doi.org/10.26650/siyasal.2020.29.2.0048


Harvard: Author-Date Style

Bulut Çevik, Z.B. (2020) ‘The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis’, Siyasal: Journal of Political Sciences, 29(2), pp. 313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048 (25 Apr. 2024).


MLA

Bulut Çevik, Zeynep Burcu,. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis.” Siyasal: Journal of Political Sciences, vol. 29, no. 2, 2020, pp. 313-335. [Database Container], https://doi.org/10.26650/siyasal.2020.29.2.0048


Vancouver

Bulut Çevik ZB. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis. Siyasal: Journal of Political Sciences [Internet]. 25 Apr. 2024 [cited 25 Apr. 2024];29(2):313-335. Available from: https://doi.org/10.26650/siyasal.2020.29.2.0048 doi: 10.26650/siyasal.2020.29.2.0048


ISNAD

Bulut Çevik, ZeynepBurcu. The Effect of Intergovernmental Transfers on Income Per Capita in Turkey: A Panel Data Analysis”. Siyasal: Journal of Political Sciences 29/2 (Apr. 2024): 313-335. https://doi.org/10.26650/siyasal.2020.29.2.0048



TIMELINE


Submitted23.05.2019
Accepted14.07.2020
Published Online30.10.2020

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.