Apr 30, 2014 - 0 Comments - Data -

Budget Expenditures

Just like households, governments also have a budget that negotiates revenues streams with expenditures. Ministry of Development classifies the expenditures under three headings: Current Transfers (Personnel and Other Current), Investment Spending, and Transfers (Interest Payments, Transfers to State Economic Enterprises, Tax Rebates, Social Security and Other Transfers).

Looking closely at three snapshots from 1990, 2000 and 2010 tells an interesting story. For instance, personnel expenditures fell from 43% in 1990 to 21% in 2000 and 26% in 2010. In 2000, interest payments was the most important item with 44% of the overall expenditures. Throughout 2000s interest payments gradually declined eventually reaching 17% in 2010.

Table 1

Table 2

Table 3

Social security payments and household aids are important components of transfer payments and they differ from other types of government expenditures in that recipients do not have to provide a service or a good in return. Two line items that grew significantly from 1990 to 2010 are the Social Security expenditures (2% in 1990, 7% in 2000, and 19% in 2010) and Other Transfers (growing from 7% in 1990 to 12% in 2010).

These data, when considered together with the transformation of budget revenues throughout 2000s, signals the contradictory consequences of the direction that public finance took in Turkey in recent years. On the one hand, the emphasis given on indirect sources of tax revenues (e.g., Taxes on Goods and Services) contributes to increasing income inequality. On the other hand, growing volume (and proportion of) transfer payments has correcting effects on income inequality. To put it differently, throughout the 2000s, while spending its tax revenues, the government tries to make up for the income inequality that it led to when collecting taxes.

Sources:

Dataset is downloaded from the Ministry of Development website, “Economic and Social Indicators” link.

Statistical Table: “Public Finance (Table V.)”

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