Fiscal Rule: Sample Country Practices and Türkiye
Chapter from the book: Akça, H. & Yurdadoğ, V. (eds.) 2024. Current Applications in Public Finance.

Arınç Boz
Zonguldak Bülent Ecevit University

Synopsis

In today's communities, the interaction between countries has intensified, becoming closer with globalization. This rapprochement has led to countries influencing each other during extraordinary periods such as crises and disasters. This interaction has increased economic vulnerability between countries. For this reason, the development of the concept of fiscal rules that impose limits on public debt, budget balance, primary balance, public revenues, and public expenditures brings with it the necessity of implementing rule-based fiscal policies. The fiscal rule, which came to the fore as a result of stagflation in the 1970s, was brought to the agenda in Türkiye with the Fiscal Rule Draft Law in 2010. The fiscal rule is defined as a concept that restricts financial indicators such as debt, budget, expenditure, and taxation, and imposes limits on fiscal policies. Within the scope of the study, variables such as public debt, budget balance, primary balance, public revenues, and public expenditures in Türkiye and selected European countries after 2000 are examined in proportion to GDP. The conducted examination has been evaluated yearly. As a result of the evaluation, it was observed that public debt in Türkiye met the Maastricht criteria starting from 2004, but Greece, Italy, Ireland, Iceland, and Portugal were dragged into a debt crisis after the 2008 global crisis. In Türkiye, it has been observed that there were times when budget discipline was deviated from due to the 2008 global crisis and the Kahramanmaraş earthquakes on February 6, 2023. According to selected countries, it has been understood that Ireland and Greece were subjected to high budget deficits after the 2008 global crisis. The COVID-19 pandemic and financial instabilities that emerged in the 2020s have made countries more vulnerable, which is why rule-based fiscal policies will continue to be important even after the first quarter of the 21st century.

How to cite this book

Boz, A. (2024). Fiscal Rule: Sample Country Practices and Türkiye. In: Akça, H. & Yurdadoğ, V. (eds.), Current Applications in Public Finance. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub584.c2404

License

Published

December 21, 2024

DOI