Türkiye’de Kamu Harcamaları ile Vergi Gelirleri Arasındaki İlişki: Fourier Eşbütünleşme ve Nedensellik Analizi
The Relationship Between Public Expenditures and Tax Revenues in Turkey: Fourier Cointegration and Causality Analysis

Summary/Abstract: This study investigates the relationship between tax revenues and public expenditures at the level of 81 provinces in Turkey, using the data set for 2004-2020. The study used the shares of tax revenues and public expenditures in GDP at the provincial level. The results of the Panel Fourier Co-integration analysis, although a cointegrated relationship cannot be detected between tax revenues and public expenditures in some provinces, a long-term cointegrated relationship has been found between the variables throughout the panel. The Panel Fourier Granger Causality Test results conclude that Turkey's fiscal synchronisation hypothesis is valid. In contrast, the tax-spend hypothesis is valid in 19 provinces, the spend-tax hypothesis is valid in 13 provinces, the fiscal synchronisation hypothesis is valid in 2 provinces, and the institutional separation hypothesis is valid in 47 provinces. The validity of the institutional separation hypothesis in most provinces will serve the purpose of closing the budget deficits due to increasing tax revenues and reducing public expenditures.

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