Relationship between tax effort and institutional quality in Turkey from the perspective of institutional economics: Theory and practice

Heterodox economic views, which started to evolve at the last quarter of 20th century, offered consistent and rational contributions to the discipline by approaching the mainstream economics from a critical point of view in explaining financial and economic differences between countries. Institutional Economics which proposes that development and growth criteria of societies should be evaluated not only with economic performance, but also by considering the performance in other factors such as law, culture, politics, history, education, technology, language and religion gains popularity in the world and in Turkey in recent years. Tax system, from past to present, in the eyes of public authorities besides being an important source of funds obtained from the entire society to be used to finance public expenditure, is also an important policy tool that effects social and political phenomena. Due to this feature tax concept needs to be evaluated with a holistic approach by public authorities by considering besides financial aspects, political, cultural, sociological and philosophical aspects as well. In this thesis given the standard classification of institutional economics, the tax concept that has bilateral effects on individual-government, individual-society, society-government relations, is analyzed in the context of formal and informal entities and related concepts such as tax compliance, tax ethics and tax culture are discussed. This thesis aims to analyze the tax issue as an institutional concept and to criticize tax policies which have been applied in Turkey from the establishment of the Republic to today with an institutional economics perspective. On this purpose, tax burden and tax effort and the factors that constitute institutional quality are calculated for 23 years from 1984 to 2017, their relationship is analyzed econometrically and the findings are interpreted with an institutional economics perspective.