Investment incentives as a regional development policy tool

In this thesis, the effectiveness of investment incentives as an instrument of regional development policy in Turkey is evaluated; the structure of the system, its implementation outcomes, and its local-level implications are examined. The primary objective of the study is to analyze the role of state-provided investment incentives in promoting regional development and to identify the strengths and weaknesses of the system through local case examples. Within the scope of the thesis, regional development theories, the rationale for public intervention, and the practices of investment incentives at both national and international levels are first addressed through a comprehensive literature review. Subsequently, the new incentive scheme that Turkey adopted in 2012 is detailed, and the regional classification model based on socio-economic development levels is analyzed. The main goal of this system is to direct capital flows towards less developed regions, thereby reducing interregional development disparities. A notable increase in the number of investment projects holding incentive certificates has been observed, particularly after 2012, and these investments have contributed positively to regional employment and production. Based on the findings of the thesis, it is concluded that investment incentives are a significant tool for regional development; however, their effectiveness is directly linked to the quality of implementation, local capacity, and sectoral targeting. Furthermore, within the framework of policy recommendations, it is emphasized that greater authority should be delegated to the local level, special support mechanisms for SMEs should be developed, post-investment performance evaluation systems should be established, and incentive models prioritizing the quality of employment should be adopted.