EC 351'01 PUBLIC FINANCE

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BOGAZIÇI UNIVERSITY Department of Economics
EC 351.01 PUBLIC FINANCE Some Public Sector
Statistics
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Introduction

• So far we have seen the main theories about
  market failure under four categories
  (externalities, public goods, imperfect
  competition and asymmetric information) and
  potential government interventions.
• In this lecture, we will look at some public
  sector statistics concerning Turkey and the rest
  of the world in relation to these subjects.

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1. Externalities

• When talking about externalities, we dwelt on
  environmental pollution to a large extent.
• Lets see how Turkey does in terms of
  environmental Pigouvian taxes and other
  instruments dealing with this problem.

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Revenues from environmentally related taxes in
per cent of GDP
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Revenues from environmentally related taxes in
per cent of total tax revenue
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• ?

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From http//www.internationaltransportforum.org/s
tatistics/ParisJan2008/Lavagne.pdf
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From http//www.internationaltransportforum.org/s
tatistics/ParisJan2008/Lavagne.pdf
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http//www.olis.oecd.org/olis/1998doc.nsf/c16431e1
b3f24c0ac12569fa005d1d99/5ee2d96153127994802568100
04dfea5/FILE/10E91095.DOC
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http//www.olis.oecd.org/olis/1998doc.nsf/c16431e1
b3f24c0ac12569fa005d1d99/5ee2d96153127994802568100
04dfea5/FILE/10E91095.DOC
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Price supports

• We talked about price floors and price ceilings
  in several economics courses.
• The government may have to use such measures in
  case there are some externalities associated with
  the production of the goods.
• In this context, lets look at agricultural price
  supports in Turkey.

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Source http//www.tcmb.gov.tr/research/parapol/en
f-nisan2008.pdf
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Source http//ekutup.dpt.gov.tr/ekonomi/rip/tr/ta
rimsal_destekleme_ortalama_urun_fiyatlari.pdf
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As percentage of farm receipts Source
http//www.oecd.org/dataoecd/12/4/39576568.pdf?con
tentId39576569
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From http//www.oecd.org/dataoecd/39/45/35218052.
pdf
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http//ressources.ciheam.org/om/pdf/a52/03400062.p
df
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2. Public Goods

• We have talked about how the market fails to
  provide the optimal amount of public goods. This
  situation might call for government intervention.
• Lets see some statistics relating to this
  subject in Turkey.

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http//www.oecd.org/dataoecd/0/12/14483688.xls
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http//ec.europa.eu/health/ph_information/dissemin
ation/echi/echi_26_en.pdf
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Public social expenditure comprises cash
benefits, direct "in-kind provision of goods and
services, and tax breaks with social purposes.
... Benefits may be targeted at low-income
households, but they may also be for the elderly,
disabled, sick, unemployed, or young persons.
Programmes regulating the provision of social
benefits have to involve a) redistribution of
resources across households, or b) compulsory
participation. From http//www.swivel.com/data
_sets/show/1005175
http//www.un.org/esa/socdev/poverty/PovertyForum/
Papers/Peter20Townsend.ppt261,5,Slide 5
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Comparators include Brazil, Philippines,
Ukraine, South Africa, Thailand, Tunisia, Mexico,
Kazakhstan, Russian Federation, Egypt, India,
Morocco, and Colombia.
http//siteresources.worldbank.org/INTTURKEY/Resou
rces/361616-1141290311420/CEM2006_Chapter2.pdf
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166 countries listed From http//fpc.state.gov/d
ocuments/organization/30046.pdf
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NATIONAL DEFENSE SPENDING AS A PERCENTAGE OF GDP
IN 2002 http//fpc.state.gov/documents/organizatio
n/30046.pdf
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Local Public Goods

• The provision of some public goods must be done
  at the regional or local level.
• According to the Tiebout hypothesis, the
  provision of public goods in demand-homogeneous
  communities gives an efficient outcome.
• Lets look at how fiscally autonomous the local
  governments in Turkey are.

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TAX AUTONOMY OF SUB-CENTRAL GOVERNMENTS
2002Source http//www.oecd.org/dataoecd/28/33/36
451568.pdf
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SUB-CENTRAL GOVERNMENTS TAX AUTONOMY
(2004?)Source http//www.oecd.org/dataoecd/52/63
/37388375.pdf
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3. Imperfect Competition

• Perfect competition is needed to achieve
  efficiency.
• The government can facilitate competition.
• Sometimes competition is just not feasible
  (natural monopoly). The government can regulate
  such industries.
• Lets see how regulation in Turkey looks.

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Index goes from least to most restrictive.Conway
, P., V. Janod, and G. Nicoletti (2005), "Product
Market Regulation in OECD Countries, 1998 to
2003", OECD Economics Department Working Paper,
No 419
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4. Asymmetric Information

• We talked about how adverse selection and moral
  hazard prevent efficiency in the product market
  as a result of asymmetric information.
• This problem is very prominent in the insurance
  market.
• One way of increasing efficiency for the
  government in this market is to make insurance
  compulsory.
• What are the compulsory insurances in Turkey?

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• Türkiyede Mecburi Sigortalar
• Kaynak http//www.hukukcu.com/bilimsel/kitaplar/m
  ecburi_sigortalar.htm

• MECBURI TRAFIK SIGORTASI
• SIVIL HAVACILIK KANUNUNUN ÖNGÖRDÜGÜ MECBURI
  SIGORTA
• FINANSAL KIRALAMA KANUNU UYARINCA YAPILAN MECBURI
  SIGORTA
• EKICI TÜTÜNLERIN MECBURI SIGORTASI
• INTIFA KONUSU SEYIN MECBURI SIGORTASI
• TEHLIKELI MADDELER VE TÜPGAZ ZORUNLU SORUMLULUK
  SIGORTASI
• OTOBÜS ZORUNLU KOLTUK FERDI KAZA SIGORTASI
• OKUL SERVIS ARAÇLARI ZORUNLU FERDI KAZA SIGORTASI
• ZORUNLU DEPREM SIGORTASI

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TAXATION

• Lets take a brief look at taxes in Turkey.

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From In Brief by the Brisbane Institute, April
2005.
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Source Jean Philippe Cotis, WHAT ARE THE OECDS
VIEWS ABOUT THE MEXICAN TAX REFORM
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• http//www.oecd.org/dataoecd/8/4/37504406.pdf

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Source Jean Philippe Cotis, WHAT ARE THE OECDS
VIEWS ABOUT THE MEXICAN TAX REFORM
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Income tax plus employee contributionsless cash
benefits by family-type, as a percent ofgross
wage for the average earnings level.Fr
om OECD in Washington, April 2002
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From http//www.oecd.org/dataoecd/43/7/37610131.p
df
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From http//www.oecd.org/dataoecd/43/7/37610131.p
df
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From http//en.wikipedia.org/wiki/Tax_rates_aroun
d_the_world