The role of financial architecture and institutional structure in growth and development: The example Diyarbakır

Financial development, institutional structure and regional policies have great effects on welfare and income distribution. Although there are many studies in the literature on institutional quality and financial development in recent years, there are no studies that analyzing banking and finance system variables on income distribution of Diyarbakır in the literature. In this thesis, the financial development of the ancient Diyarbakir for the last 20 years has been analyzed in the light of banking indicators and selected macroeconomic indicators, based on the McKinnon-Shaw hypothesis. In the study, time series variables were analyzed between 1988-2021 using 3 macro models. The regional incentive policies implemented in Turkey are considered as a component of the financial architecture, cointegration analysis and long-term relationships are examined in the light of selected macroeconomic indicators. According to the findings, it has been determined that the loan-credits volume in Diyarbakir has a long-term relationship with investments and per capita income, the wealth and income distribution in Diyarbakir increases with the increase in the loan volume, and it is compatible with the McKinnon-Shaw hypothesis approach, where there is a growth based on loans and borrowing. It has been revealed that the increase in loanable funds also causes an increase in the funds that can be directed to investments at the regional-provincial level. It was observed that the macro indicators followed a statistically positive trend in the periods when Diyarbakir also had a great development potential, the strengthening of democratic institutions and the absence of regional conflicts. Key Words Diyarbakır, Finansal Mimari, Finansal Gelişme, Büyüme, Bölgesel Gelişme, Finansal Baskı, Tamamlayıcılık Hipotezi, McKinnon & Shaw Hipotezi, Bölgesel Teşvik Sistemi