Özet:

The coexistence of economic units has revealed social needs. Meeting the social needs is possible with the realization of public expenditures of the state. There are two main views on public expenditures in the economics literature. The first of these advocates that public expenditures should be at a minimum level. According to the second view, the state should not have such a limitation. After the 1929 crisis, the second opinion gained weight. Therefore, the state has started to direct public expenditures to areas such as education and health. Thus, the human development of countries has also been supported. There is a great deal of interest in the literature on the impact of public spending on human development. As a matter of fact, economic growth can accelerate as a result of increased human development. The aim of the study is to analyze whether public expenditures have an impact on human development. In this direction, annual data covering the period 1996-2019 are used in the study and 30 countries in the upper middle-income group are discussed. Westerlund (2005) panel CUSUM cointegration test is used in the analysis. FMOLS and DOLS coefficient estimators are calculated to estimate the coefficients. According to the findings, a cointegration relationship is found between public expenditures and the human development index. In addition, according to the coefficient estimates, it is seen that the increase in public expenditures has a positive effect on the human development index. The absence of a study that analyzes the relationship of public expenditures with the human development index for countries in the upper middle income group with our best knowledge can be expressed as the contribution of the study to the literature.

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