Relationship Between Economic Growth and Nonprofit Sector: An Analysis of Structural Breaks and Causality in TurkeyHalil Tunalı, Gülçin Kaya İnceiplik
The nonprofit sector, which is continually developing in terms of quality and quantity, is considered crucial in sustainable development and economic growth. The sector’s presence in the relevant literature is currently limited to social, cultural, and political fields. Consequently, the relationship between nonprofit organizations and economic growth is scarcely studied in the literature, with most studies focusing on conceptual explanations of the financial size of nonprofit organizations. Based on the example of Turkey, for a crucial start in this area, the primary aim of this study is to examine the relationship between gross national product (GNP) and nonprofit organizations’ incomes during 1975–2006. For evaluating the causality between variables, Dickey Fuller and Augmented Dickey Fuller were applied with the variables determined as stable at the first difference. According to results from Zivot and Andrews applied by considering structural breaks as the first step in the analysis, which is different from those used in the literature, revealed that breaking points for the GNP and nonprofit organizations were in 2000 and 1993, respectively. According to Toda–Yamamoto results, no causality was observed between the income of the nonprofit organizations and economic growth. In light of these findings, a proposal was made to create new public policies for establishing an effective third sector and aiding the development of this sector through a strong foundation.
Kâr Amacı Gütmeyen Sektörün Ekonomik Büyüme ile İlişkisi: Türkiye Örneği Üzerine Yapısal Kırılma ve Nedensellik AnaliziHalil Tunalı, Gülçin Kaya İnceiplik
Gün geçtikçe niteliksel ve niceliksel açıdan gelişme gösteren kar amacı gütmeyen sektörün sürdürülebilir kalkınmada ve ekonomik büyümede önemli bir rol oynadığı düşünülmektedir. Sektörün literatürdeki yeri ise sosyal, kültürel ve politik alanla sınırlıdır. Nitekim kâr amacı gütmeyen kuruluşlar ile ekonomik büyüme ilişkisi akademik çalışmalarda pek ele alınmamakla birlikte, yapılan çalışmaların çoğu sektör kuruluşlarının finansal büyüklükleriyle ilgili kavramsal açıklamalar içermektedir. Türkiye örneği üzerine bu alanda önemli bir başlangıç yapmak adına, bu çalışmada 1975-2006 yılları arasındaki dönem dikkate alınarak kâr amacı gütmeyen kuruluşların gelirleri ile gayri safi milli hasıla arasındaki ilişki araştırılmaktadır. Değişkenler arasındaki nedenselliği test etmek için öncelikle Dickey Fuller ve Augmented Dickey Fuller birim kök testleri uygulanmış ve değişkenlerin birinci farkları alındığında durağan oldukları tespit edilmiştir. Çalışmadaki analiz yönteminin literatürden farklı olarak ele alındığı ilk aşama olan yapısal kırılmalar göz önünde bulundurularak uygulanan Zivot ve Andrews test sonuçlarına göre ise, gayri safi milli hasıla için 2000 yılı, kâr amacı gütmeyen kuruluşlar için 1993 kırılma yılı olarak tespit edilmiştir. Son olarak uygulanan Toda-Yamamoto yaklaşımıyla elde edilen sonuçlarda; kâr amacı gütmeyen kuruluşların gelirleri ile ekonomik büyüme arasında nedensellik ilişkisinin olmadığı tespit edilmiştir. Bu bulgular ışığında, sosyal ve finansal alanda etkin bir üçüncü sektör yapısının oluşturulması ve bu yapının güçlü bir temele oturtulması için kamu sektörüne yönelik politika oluşturma önerilerinde bulunulmuştur.
Global neoliberal policies that came into effect after the decline of the welfare state toward the end of the 1970s led to an increasing number of nonprofit organizations performing important functions of social welfare, thereby becoming crucial for economic development and progress. When considering the financial size of the nonprofit sector, these organizations clearly represent a significant economic power, particularly in relation to developed countries. The importance of the sector in the literature is currently limited to the social, cultural, and political fields, although nonprofits have become increasingly important both qualitatively and quantitatively. Moreover, the economic value created by them is not particularly known in the public sector. One of the reasons for this phenomenon is that data on nonprofit organizations are limited and are not collected systematically. In summary, although studies on the relationship between nonprofit sector and economic growth are almost nonexistent, most of the studies are related only to conceptual explanations of the financial size of organizations in the sector. The original and significant work in this study is particularly important because a limited number of the available theoretical and empirical works assessing Turkey’s experience, and no studies, including those on the econometric model, are noted in foreign literature.
In this context, the primary aim of this study is to examine the relationship between economic growth and nonprofit organizations during 1975–2006. The causality relationship between nonprofit organizations and economic growth was examined by comparing nonprofit private service organizations’ revenues and gross national product (GNP) variables. According to the results obtained by applying time series methods on annual data, the empirical study performed on Turkey’s sample is considered a foundational contribution to the literature. This study can contribute to the development of the sector by offering information on the nonprofit sector and particular raising the awareness of public institutions. In this context, primarily in terms of the analysis, the conventional unit root tests, namely, Dickey Fuller and Augmented Dickey Fuller, were applied, and the variables were determined as stable at the first difference level with a trend and intercept. According to the results of Zivot and Andrews, applied by considering the structural breaks as the first step in the analysis, which was different from those using in the literature, the GNP was an intercept stationary, and the breaking point for this variable was 2000. We can assume the crisis experienced in November 2000 caused this break. The nonprofit organizations were found to be in a stable trend, with the breaking point in 1993. According to the results of the Toda– Yamamoto approach, which considers structural breaks, no causality was concluded between nonprofit income and economic growth. Since the data covered in the study is attributed to a specific period, the nonprofit sector data should be included in official statistics programs with a more comprehensive and detailed approach to increase the representative power of the obtained results and to conduct more comprehensive research.
In summary, although the share of the nonprofit sector revenue in Turkey’s GNP is increasing and has achieved financial rates of a magnitude equal to that of developed countries, we found no correlation when comparing economic growth in Turkey. The establishment of an effective sector in social and financial fields and forming this structure on a strong foundation is critical to Turkey’s social structure and sustainable development. The liberalization of the market as well as the nonprofit sector and the abandonment of the government’s role in social welfare to an effective nonprofit sector are the most crucial factors in the formation of this structure. To achieve this, the relationships of the public sector with the nonprofit sector must first be arranged within a non-conflicting structure, and a balancing cooperation should be maintained. Although various improvements were made in the European Union accession process in 2004, legal reforms to meet international standards must be implemented and regulated. These improvements should not only be limited to democratic reforms. To support the development of funding strategies for nonprofit organizations, improvements in tax legislation can be applied to solve issues in the financial field. Moreover, similar to developed countries, the diversification of sector actors in accordance with both the legal and social structures can provide solutions to numerous infrastructure problems. However, these reforms should not be copied from a western-centric, reference but should be developed with an appropriate composition, with the development of a new sector model that is adaptable to Turkey’s unique social structure.