Spatial Analysis of Political Budget Cycles in Türkiye

Abstract

This study offers both theoretical and empirical contributions to the Political Budget Cycle (PBC) literature by examining the effects of general elections on provincial-level public expenditure growth in Türkiye between 2005 and 2024. Utilizing panel data from 81 provinces, the analysis employs Two-Stage Least Squares (2SLS) alongside Spatial Econometric Models (SAR and SEM), revealing significant increases in public expenditures during election years -particularly in capital expenditures. Political variables such as the Herfindahl-Hirschman Index (HHI) for measuring electoral competition and the ruling party's vote share (AKP) are found to significantly influence both the level and composition of public spending. Moreover, spatial analysis shows that public expenditure decisions are shaped not only by local political dynamics but also by the political and economic structures of neighboring provinces. The study demonstrates that spatial effects—previously underexplored in the PBC literature—play a substantial and systematic role. The findings reveal a hybrid PBC structure involving both opportunistic and partisan elements: while the general increase in spending during election periods points to opportunistic behavior, the geographic concentration of spending in specific regions aligns with partisan strategic targeting. In this respect, the study integrates local and central-level political strategies within a spatial analytical framework and provides original theoretical, empirical, and methodological contributions to the PBC literature.