Public expenditure strategy to provide fiscal discipline in Turkey: Analysis of term 1980-2002

Fiscal discipline is a term that refers to public expenditure and publicrevenue must be equal. In the worldwide, there have been numerousdebates on it. These ideas can be divided into two sides. One idea is relatedto social welfare state and the other is based on neo-liberal approach. Thereis no doubt that fiscal discipline problem affects adversely macro economicindicators in an economy. Therefore, countries introduce various applicationsto solve this problem. These applications focus much more on publicexpenditure and budget techniques. Applied budget techniques in relation toexpenditure discipline as follows: multiyear budgeting, middle-termexpenditure programme, fiscal transparency, performance budgeting,strategic planning and so on.After 1980, Turkey?s public deficit has increased constantly so far.Increased public deficit has resulted in an increase of both domestic andexternal debt stock. As a result; fiscal discipline difficulty has been emergedin Turkey. To solve fiscal discipline problem, decreasing of public expenditureand budget techniques have been considering as a crucial priority since2000. These approaches are based on shrinking of public expenditure.Whereas; cause of fiscal discipline problem is based on short of publicrevenues.To sum up; ensuring the fiscal discipline in Turkey, in the framework ofdiscipline of public expenditure, public revenues have to be increased insteadof application of budget techniques. In other words, tax revenues must be thefirst place to cope with the problem in relation to public deficit. Yet, domesticdebt management policy has been the first solution to finance of public deficitand this solution has resulted in, in turn, high rate of interest, hot moneypolicy and a huge interest payment in Turkish budgets. Finally we have tocontemplate on tax revenues referring to long-term policies instead ofpalliative solutions.