Relationship between human development and economic growth: An empirical investigation for Turkey

This study aims to investigate the relationship between human development and economic growth in Turkey between 1971 and 2019. The direction, magnitude and causal nature of the relationship between the two variables were tried to be determined. Also, the effects of public health expenditures, income distribution, democracy and institutions on human development were examined. It examines a two-way relationship: from human development to economic growth and from growth to human development. In determining the relationship from human development to growth, investment rates and gini index variables were included in the model. In determining the relationship from economic growth to human development, public education and health expenditures and the gini index are included to the model. In this context, the Human Development Index was constructed for the 1971-2019 period in the case of Turkey. The constructed index is used as a human development indicator in the analysis. At the same time, it is aimed to reveal the interactions of democracy and institutions with human development. Accordingly, the effects of democracy and institutions variables on human development for the period 1973-2018 were investigated. ARDL bounds test method and Granger Causality test were used to determine the relationships between variables within the framework of the models considered. The findings show that there is a bidirectional positive and causal relationship between human development and economic growth. On the other hand, the findings suggest that the potential impact of public health and education expenditures, democracy and institutions on the level of human development has not been sufficiently realized.