erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

 

Budgetary Trade-offs of Defence Expenditures in Turkey

Gülay Günlük Þenesen (Istanbul University)

Abstract

This paper investigates the budgetary trade-off structure of security defence+internal security) expenditures in Turkey for the period 1970-1998. Turkey initiated an ambitious arms modernization program in mid ‘80’s and recently revised the prospects until year 2030, which is estimated to cost about $ 3.5 billion per year. A modified version of Todaro’s distributive share index of social welfare is used to quantify the impacts on the growth of primary budget expenditures of the functional categories: Security, Education, Health, General Administration, Infrastructure, and Social services. We find that defence expenditures dominate overall security expenditures and are less affected in times of bottlenecks in the economy. Within defence expenditures, equipment purchases have been dominating in the last five years. However, one cannot argue that, either internal or external, security expenditures systematically lead to increased budget expenditures, hence to budget deficits. Similarly, a characterising pattern of negative budgetary trade–offs of security expenditures in terms of other components is not identified. We then analyse the expenditures of the Defence Industry Support Fund in an attempt to find the cost of the modernization program to the economy as well as its pressure on external debt and hence interest payments burden in the budget.

 

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