Pro-poor fiscal policy: A review in Turkey related to the period afeter 2002

Poverty is an economic and social problem limiting a human's right to live in dignity. It is essential that governments, which assume serious roles in the struggle against poverty, use public resources to promote social welfare. However, it is a sad truth that these resources are limited and that supporting the poor continuously by social assistance is not sustainable. Governments that aim to reduce poverty and implement policies that will enable individuals to live at a higher level of prosperity may enable fiscal policy to deliver positive results for the poor if fiscal policy tools are used in a way that improves the assets and capabilities of the poor. The pro-poor fiscal policy is the most comprehensive and effective economic policy instrument implemented by governments for reducing poverty, which includes ensuring a sustainable and widespread economic growth, developing human capital, and reducing the risks and threats that lead to poverty. In the literature, studies conducted to examine the struggle against poverty are generally discussed in light of social assistance and policy recommendations are presented accordingly. In this study, however, a theoretical framework is proposed to study pro-poor fiscal policy holistically from a macro-economic perspective. As a case study, the framework is applied to the study of pro-poor fiscal policy in Turkey to examine the importance, successes and implementation results of the relevant policies. In the last part of the thesis, an alternative pro-poor fiscal policy strategy is developed, complying with also the macroeconomic targets of Turkey in 2023 and 2030. When Turkey's application of the struggle against poverty for the last one and a half decade is examined, it is seen that despite the fact that there are some positive developments in favor of the poor, there are still some measures indisputably needed to be taken. As a result of the evaluation, the most important factor determining the success of the pro-poor fiscal policy in Turkey is found out to be the existence of a strong political stability and the sustainable economic growth and policy implications ensuring macroeconomic stability accompanied by fiscal discipline. Furthermore, in order to obtain more effective results in the implementation of pro-poor fiscal policies in Turkey, economic development should be achieved – as part of direct approach to struggle against poverty – and the policies with social content such as nutrition, housing, health, education should be coordinately implemented – as part of an indirect approach to struggle against poverty –. However, when the adverse effects of the social policies directly targeting the poor are considered, giving priority to macroeconomic stability and economic growth will contribute to the reducing of poverty via eliminating the factors leading to poverty and improving the situation of the existing poor. Key words: Poverty, Social Protection, Inclusive Growth, Pro-Poor Fiscal Policy