The economical and social effects of the changes occuring in the structure of public expenditures after 1990 in Turkey

ABSTRACT Public expenditures as an effective financial instrument, have effects on the economical and social structure. The relevant effects results from some specialties in the structure of the public expenditures. Nowadays, Public expenditures are an important financial policy instrument that is used to develop modern functions such as stability, economical development and making progress and providing the income distribution. Furthermore, public expenditures policy depends on how they are financed with their effect to economical and social structure of the country. There are various classifications regarding the combination of the public expenditures. These can be collected under three titles as; economical classification where public expenditures are classified according to economical effects, functional classification for services and administrative classification for administration unit that make the expenditures. Public expenditures after 1990 in Turkey have been mostly made by loaning policy. This caused the disorder in the budget structure. The reason for disorder of the budget structure included interest payments for loans and cased transfer expenditures share to increase in the budget and the budget deficit have been widened and gained stability. The increase of the budget deficit caused disorder of monetary and financial indicators and provided a delicate circumstance for economical structure. Consolidated budget structure changed for loan interest payments and caused less finance source to be set for investment expenditures. This became a preventing factor for human and physical savings to be in the level wanted. IV