Özet:

Prior to 2005, budgetary procedures in Turkiye were, for the large part, governed by General Accounting Law No. 1050. Then, in order not only to promote greater accountability and fiscal transparency but also to mandate the more efficient and effective use of public funds, the Turkish legislature passed Public Financial Management and Control Law No. 5018 in 2003. This law, upon coming into effect in 2005, greatly revamped extant budget procedures. Several seminal empirical studies in the literature have demonstrated a linear relationship between budget procedures and fiscal discipline. One of the more important outcomes of Law No. 5018 was the creation of an index that could be used to measure the degree to which Turkiye’s budgetary procedures have improved whilst also allowing analysts an opportunity to compare fiscal discipline before and after 2005. This study calculates budgetary procedure indices for two specific terms, 1998–2005 and 2005–2021. In this article, I employ the methodology developed by Dabla-Norris et al. (2010) to calculate two separate indices, one of which pertains to the different stages of the budget process (i.e., planning, approval, implementation) and the other to its categories (i.e., top-down procedures, rules and control mechanisms, sustainability and credibility, comprehensiveness, transparency). Since, however, minor adjustments too small to be considered true reforms were made to budgetary practices and procedural rules both prior to and after 2005, I have calculated separate index values for the periods during which these changes were in effect. The relevant indices reveal that Law No. 5018 has had a very significant impact on budgetary procedures. Of all the various budgetary procedures, the budget planning stage experienced the greatest improvement, rising from 1 to 2.74 following the implementation of Law No. 5018. If, moreover, the primary surplus commitments made to the IMF for 1998–2008 are accepted as a fiscal rule, the score for the planning stage rose from 1.14 in 1998–2004 to 2.88 in 2005–2008. With a score of 1.79 in 1998–2004 and 3.43 in 2005–2021, the budget implementation stage boasts the highest index scores of all variables. As for the different categories examined, we find that the majority of budgetary procedures experienced an increase in index scores after 2005. In addition to this, six variables that had earned a score of 0 prior to 2005 experienced no increase whatsoever after the new regulations were subsequently implemented. These (i) include costed sector strategies, (ii) sensitivity analysis discussed in annual budget documents, (iii) the identification of separate impact of current versus new policies in budget documents, (iv) limits to amendments by the legislature, (v) top-down sequence of budget approval, and (vi) stock and monitoring of expenditure arrears. While the score for overview aggregate fiscal risk in budget documents increased only slightly, that for time limits for budget approval remained unchanged. Those variables that saw only a minimal score increase belong, for the most part, to one of two categories—(i) rules and control mechanisms and (ii) sustainability and credibility. In contrast to transparency and comprehensiveness, revisions to these categories were inadequate. If, moreover, primary surplus goals are counted as fiscal regulations, we observe the 1998–2004 score of 1.33 to increase to 2.67 for in 2005–2008. As such, while Law No. 5018 precipitated noticeable improvements to budgetary procedures, it had a negligible impact on fiscal discipline. Though primary budget surplus-to-GDP increased to a lesser degree in 2005 and 2006 than during the previous term, 2007–2008 budget surpluses largely mirrored the previous term. Beginning in 2009, however, primary budget surplus-to-GDP ratios experienced a rapid decline. Whereas the budget then saw a partial recovery from 2011 to 2015, primary budget surplus ratios were lower than pre-2005 figures. A similar downward trend began in 2016, culminating in negative figures between 2019 and 2021. A primary budget deficit was likewise recorded during these same three years. If, moreover, the primary surplus commitments made to the IMF from 1998 to 2008 are considered fiscal rules, then the revisions made to budget rules and control mechanisms did in fact have a positive impact on fiscal discipline. Primary budget balance-to-GDP ratios have, with the sole exception of 1999, been exceptionally high. Central government debt-to-GDP ratios likewise reveal that budgetary procedure revisions had a positive effect on fiscal discipline. Decreases in Turkiye’s debt stock are a result of the country’s IMF debt decreasing since 2002.

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