Economic literature on the explanation of budget deficits has been focused on two main issues On one hand the accumulation of public debts in recent decades and on the other hand the large observed cross countries differences on budget deficits and debt Conventional economic arguments alone are not sufficient to explain this behavior Therefore recent political economy literature emphasizes the role of political and institutional factors in the explanation of the fiscal policy and in particular of the budget balances behavior The purpose of this study to investigate effects of political and institutional factors on budget deficit in developing countries And in this paper an empirical study for 33 developing countries included Turkey using cross section is given According to estimated results there is significant statistical relationship between budget deficit and economic freedom level rule of law burden of government regulation wastefulness of government spending and political stability Key Words: Budget Deficit Political and Institutional Factors Cross Section Analysis
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