Political Business Cycle on the Agricultural Supports in Turkey (original) (raw)
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Political Business Cycles Theories: Evidence from Turkey
The studies that have been conducted in recent years suggest that incumbent governments manipulate the economy for political reasons, in particular, with the aim of re-election. In new political economy literature, this situation is known as the Political Business Cycle; a macroeconomic cycle induced by the political cycle. The theory of PBC is studied under four theories called “The Traditional Opportunistic PBC Theory”, “The Traditional Partisan PBC Theory”, “The Rational Opportunistic PBC Theory” and “The Rational Partisan PBC Theory”. From these theories, the assumptions of the “The Rational Opportunistic PBC Theory”, “The Traditional Partisan PBC Theory” and “The Rational Partisan PBC Theory” do not seem to be valid in the Turkish context; hence testing of these models would not be meaningful. Therefore, in this study, “The Traditional Opportunistic PBC Model” is examined. In the study, the quarterly series of GDP, inflation, money in circulation (M0), money supply (M1) for the period of 1987- 2012 are analyzed with “Seasonal Box-Jenkins Models”. According to the results obtained from this study, political business cycles hasn’t been observed in any series. This means that The Traditional Opportunistic PBC Theory isn’t valid for Turkish context.
Searching for Political Business Cycles in Turkey: Findings from Fiscal Policy
In this study Traditional Opportunistic Political Business Cycle Theory was tested for the Turkish economy using series of public expenditure, other public transfer expenditure, tax revenues and budget deficit for the period 1987Q1-2002Q4. The reason for the use of these variables in the analysis is that these variables have often been used in analyses for fiscal policy at the macroeconomic level in the literature of Traditional Opportunistic Political Business Cycle Theory. In the determination of whether or not political opportunis-tic policies were observed in general elections held in the 1987Q1-2002Q4 period, the " Seasonal Box-Jenkins Models " that also used by Alesina, Cohen and Roubini (1992) for OECD countries and industrial countries was used in this study. Since the findings of the present study did not identify any political business cycles identified in other public transfer expenditure, public expenditure, tax revenue and budget deficit data, it could be concluded that Traditional Opportunist Business Cycles Theory is not valid for Turkey. In other words, government parties did not manipulate fiscal policies to win the elections in Turkey in the 1987-2002 period.
Heterogeneous impact of agricultural support policies: evidence from Turkey
Environment, Development and Sustainability
Agricultural support policies, which increase production to excessive levels, have been heavily criticized for their distortional effects on farmers' decisions. High input consumption, which harms the environment, and the distribution of supports, which causes income inequality among farmers, are also the other factors that economists criticize these support policies. However, in recent years, the use and dependence on production and land have been increasing globally due to fears of food insecurity in several countries. In this article, the impact of a support policy on cotton farmers' land in Turkey is evaluated using a detailed farm-level micro dataset. We use the dynamic panel model to consider the production dynamics, unobservable individual heterogeneity, and the endogeneity of the support variable. Our results show that considering the support variable as endogenous significantly increased its impact on farmers' land. A farmer's past land allocation decisions also affected their current lands holdings. However, the results varied considerably between regions and between different land sizes. Therefore, the findings show the importance of heterogeneity in the impact of support policies. We conclude that due to the heterogeneous impact of support policies, it might not be possible to discuss the effect of support policies using an average estimate applicable for all farmers. Therefore, a different support policy considering regional characteristics or farm size is necessary to obtain the desired policy outcomes.
Agricultural Support Policies and Public Budgeting in Turkey
Agriculture is a leading strategic sector in Turkey as it is in entire world. Despite this strategic significance, risks, and uncertainties, the dependence on natural conditions turns agriculture into a disadvantaged sector. Just because of these disadvantages, agriculture is protected by various support policies throughout the world. Agricultural policies of Turkey have initiated with institutionalization policies of the Republican period and progressed through product supports, input supports, and low-interest credit implementations of the planned period. These policies experienced serious reforms at the beginning of 2000s. Within the scope of Agricultural supports and Reforms Implementation Project (ARIP), agricultural supports tried to be gathered under a single roof and Direct Income Support (DIS) implementations started. The DIS implementations lasted for eight years and terminated in 2008. The aim of this study is to examine agricultural supports in Turkey and their shares in the public budget. As material, macroeconomic data are used in this study. The data consist of transfers from the ministry of food, agriculture, and livestock to agriculture and budget numbers. The results of the study reveal that current agricultural policy tools are implemented as area-based supports, subsidiary payments, rural development, and agricultural insurance supports. The budget allocated to agriculture and the share of agricultural supports in Gross Domestic Product (GDP) of Turkey does not exhibit much change in years. Considering the policies and supports provided in developed countries and especially in European Union (EU) countries, it recommend for Turkey that the share of agricultural supports in total budget should be increased to levels in those countries.
Testing for political business cycles
Journal of Policy Modeling, 1990
This paper presents a new test of political business cycle and partisan theories of politico-economic interaction. It builds on the hypothesis that model dynamics and not just the intercept of a time-series model vary over electoral periods and party regimes. Using long-run data for the United States, we find evidence that Presidential elections and the political party of incumbent Presidents influence the behavior of economic targets and instruments. However, these outcomes do not arise independently of recent economic performance. Therefore, our results support the satisficing model of Frey and Schneider and reject the traditional version of the theory.
Searching for opportunistic political business cycles in Turkey
2004
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Do Agricultural Supports Affect Production? A Panel ARDL Analysis of Turkey
Tarım Bilimleri Dergisi, 2023
One of the controversial issues in the trade negotiations carried out with the World Trade Organization deals with agricultural supports related to production, which is claimed to disrupt the market system by creating an imbalance in supply and demand in the domestic market and to cause world trade contraction. In this context, the aim of this study is to examine the production effect of the deficiency payments and land-based direct supports widely used in Turkey. The study conducts a panel autoregressive distributed lag analysis for 11 selected agricultural products (wheat, corn, sunflower, seed cotton, paddy, soybean, canola, safflower, tea, dried beans, and olives) for the 2002-2019 period. The findings from the study are as follows: i) Increases in deficiency payments and land-based direct supports increase short and long run production. However, land-based direct supports have less of an effect on production. ii) While increases in input prices have a negative short run effect on production, the long run effect is the opposite. iii) Agricultural product price is not an important indicator for producers. This finding can be explained by the fact that farmers accept agricultural supports as a complement to the price variable in their production decisions. iv) Increases in the minimum wage added to the model based on Turkey's structural characteristics have a negative long run impact on production. v) No statistically significant relationship exists between the number of tractors used to represent agricultural mechanization and the amount of production.
Effects of government supports and credits on Turkish agriculture
Journal of Agribusiness in Developing and Emerging Economies, 2019
Purpose Domestic supports on Turkish agriculture have substantially increased over the past decade while empirical evaluation of their output impact is limited. Also, the existing literature often neglects potential spatial spillover effects of agricultural policies or subsidies. The purpose of this paper is to quantify the direct and spillover effects of Turkish agricultural domestic measures and agricultural credits use on the added agricultural value. Design/methodology/approach This study applied a spatial panel model incorporating spatial interactions among the dependent and explanatory variables to evaluate the impact of government support and credit on Turkish agricultural output. A provincial data set of agricultural output values, input factors and government subsidies from 2004 to 2014 was used to model the spatial spillover effects of government supports. Findings Results show that a one percent increase in agricultural credits in a given province leads to an average incr...
This study was conducted to evaluate causality between long-term relationships among production amount, cultivated area and yield of cotton lint for Turkey for the period 1925 to 2015, and to determine the strength and direction of the relationships by means of vector error correction model (VECM) and cointegration analysis. After taking the first differences of the original (non-stationary) time series data on cotton lint, stationary time series data were obtained and exposed to cointegration analysis to determine whether any long-term relationships among the variables exist and whether the series were integrated. Both production amount and cultivated area had a positive effect on yield. The effect of production amount on yield is more than that of cultivated area. In order to find the direction of the long term relationship and the short term effects, vector error correction model (VECM) analysis was used and the analysis presented evidence of a causality relationship between cotton production and yield in Turkey. Holt exponential smoothing method was used to forecast cultivated area, amount of production, and yield from the period 2016 – 2026. The results of Holt method revealed that cultivated area, amount of production, and yield are expected to increase for the above-mentioned time period. New agricultural policies should be formulated in order to cut back on an estimated 20 billion dollars forecasted to be spent on cotton imports between 2016 and 2026.
An Overview of Agricultural Support Policies in Turkey: A Comparative Regional Analysis
the rest: journal of politics and development, 2022
The agricultural sector is seriously affected by changes in many economic, social, or environmental factors. Hence, the necessity of supporting the sector by governments in various ways has become an indisputable reality. However, regional characteristics must be taken into account in order for these supports to reach their goals. Using a dataset spanning from 2002 to 2020, the current study comparatively analyses the changes in the agricultural support and agricultural production, income, and the value of products in two agricultural regions of Turkey, Central Anatolia and Southeast Anatolia regions. The results highlight that the increase in agricultural income is very low in both regions compared to the substantial changes in agricultural support policies. Additionally, the increase in the values of agricultural products in both regions is much higher than the increase in agricultural income, suggesting that the costs in agricultural activities are too high in the analysed regions.