An evaluation of the administrative absorption capacity of Türkiye regarding EU financial assistance for regional development within the 2007–2013 financial framework

This thesis aims to examine Türkiye's administrative absorption capacity regarding the Instrument for Pre-Accession Assistance (IPA) funds received during the 2007-2013 period as a candidate state on the road to European Union (EU) accession. The EU's Regional Policy is a significant tool to reduce economic and social disparities. In this context, financial assistance is essential for candidate countries like Türkiye. The thesis focuses on the evaluation of the financial assistance received by Türkiye particularly in the field of regional development during the IPA-I period (2007-2013) and the fund losses experienced in the utilization of the IPA funds based on the Indicator Set and Methodology adopted by the Netherlands Economic Institute (NEI) as regards the administrative absorption capacity for the EU financial assistance. In this scope, it assesses Türkiye's administrative absorption capacity by focusing on core elements such as fund allocations, institutional structure, management, programming, planning, human resources, project pool, capacity development, implementation, monitoring and evaluation, communication strategy, and financial audit and control. The main aim of the research is to provide recommendations for Türkiye to use EU financial assistance more effectively in a way to minimize the absorption problems and fund loss. The theoretical framework of the thesis is based on the literature of regional development, financial assistance, and EU regional policy. It thoroughly addresses the main tenets of administrative absorption. In this context, using a comparative analysis method, it highlights the differences, contradictions, similarities, and key implications for Türkiye by comparing its financial assistance during the PHARE period with the examples of Central and Eastern European countries and with other candidate and potential candidate countries under the IPA-I. As a research method, the regulations and reports of the European Commission were examined, existing literature on the absorption capacity of the EU funds was screened, and comprehensive analyses comparing Türkiye's financial assistance with that of other candidate countries were conducted, considering PHARE as well as IPA-I periods. In the evaluations of the thesis, significant fund losses are observed in the IPA's general and component-based reviews, particularly under the OPs in the Regional Development component. Additionally, the thesis presents evidence showing that standards applied to other candidate countries were not applied for Türkiye by the European Commission in the allocations and rules for implementation of the funds in an unfair manner. The calculations conducted within the scope of the thesis indicate that, if the same criteria applied to other candidate countries (the criterion of €30 per capita) were also applied to Türkiye, Türkiye should receive at least four times more funding allocation from the EU. In this context, the thesis identifies several significant structural steps to enhance Türkiye's absorption capacity of the EU funds. These include initiating a negotiation process with the European Commission to address inconsistencies in IPA allocations, eliminate limitations in utilizing grant programs, and remove geographic restrictions for certain OPs and measures; revising strategic approaches, priority areas, and management and coordination structures under the DIS; designing an integrated regional operational program to ensure efficiency in programming and implementation; designating an intermediate body within the IPA framework primarily by assigning this role to the development agencies; and diversifying implementing agencies with sectoral institutions. The study also prioritizes strengthening the project pipeline at central, regional, and local levels, as well as ensuring a broader dissemination of funds to the grassroots. Additionally, the thesis emphasizes strengthening alignment and complementarity with the national budget and sectoral policies; designing integrated and simplified processes with e-government; reinforcing monitoring and evaluation through an indicator-based approach and systematizing them to contribute to programming; ensuring effective communication, information, and visibility; and enhancing risk management in the field of financial management and control as other key elements of administrative absorption capacity. In this context, the thesis offers concrete recommendations for the necessary administrative improvements to enable Türkiye to utilize EU funds more effectively.