Analysis of macroeconomic indicators in the context of political factors: An experimental analysis in the sample of middle and upper income group countries

The effort and quest for "limited resources to meet unlimited needs" has been one of the main problems of all societies in history. In this context, when the tragic adventure in the historical process is quickly passed and examined today, the relations between the social structure elements such as economy, state and politics maintain their actuality and importance as the main activity fields of the social sciences in today's modern world. As a matter of fact, the role of politics and the authority area of the state in economic life is one of the irreconcilable areas of conflict between different economic ideologies, understandings and schools. Some of the debates within this framework, while strongly advocating that the state and politics should play an active role in economic life; another understanding claims that the interventionist state and political influence will harm economic activities. The debates about where the state and politics will take place in the economic life have a wide literature. The majority of these debates have extensive literature on opposing views. This thesis is based on a dialectical relationship between economics and politics, which is claiming that there is a deep and tight link between political factors and economic indicators in the context of Public Choice Theory. Thus, all state policies, including public policies; it should not ignore the fact that politics or economics cannot be completely autonomous disciplines, since the economic has positive or negative effects on the political and the political on the economic. This thesis examines the argument based on empirical research. In this study, the interaction of political factors with macroeconomic variables is analysed by using panel data analysis method using data of 32 middle income and 38 high income countries. In the selection of the country groups to be used in the study, homogeneity of the country groups and the continuity of the data were taken into consideration. The data to be used in the study are classified in two different ways as economic and political. Economic data are macro-economic indicators such as Gross Fixed Capital Formation (% GDP), labor force, Consumer Price Index, Current Account Balance (% GDP), unemployment, annual growth rates of GDP and Direct Net Foreign Investment Inflows (% GDP). As for the political data; indicators of political stability and absence of violence/terrorism, rule of law, government effectiveness, control of corruption, regulatory quality and voice-accountability were used. These datas were obtained directly from the World Bank data distribution system. In the first three chapters of the study, conceptual and theoretical framework is presented. In the last section, the empirical study of the argument that is the claim of the study is given. For this purpose, the presence of cross-sectional dependence between countries; LMadj test was used to determine the cross-sectional dependence between countries. The stability of the series were examined by the CADF the unit root test and it was found that the majority of the series were stationary in the level values, and that a limited number of series were stationary in the first difference rather than in the level values. The interaction between variables was analysed by the system GMM method. Accordingly, the effects of political factors on national income in middle-income countries; The effects of unemployment, current account balance and foreign direct investment were higher in upper-income countries. As a result of the analysis; It has been seen that political factors have a positive effect on macro-economic magnitudes and it has been proved that there is a dialectical relationship between political factors and macro-economic indicators.