nep-cwa New Economics Papers
on Central and Western Asia
Issue of 2005‒03‒06
two papers chosen by
Nurdilek Hacialioglu
Open University

  1. Reforming Turkey's public expenditure management By Rauf Gönenç; Willi Leibfritz; Erdal Yilmaz
  2. Political Risk in Syndicated Lending:Theory and Empirical Evidence Regarding the Use of ProjectFinance By CHRISTA HAINZ; STEFANIE KLEIMEIER

  1. By: Rauf Gönenç; Willi Leibfritz; Erdal Yilmaz
    Abstract: Fiscal imbalances were a main cause for chronic high inflation and macroeconomic instability before the 2000/2001 crisis. Fiscal consolidation is the cornerstone of post-crisis stabilization. It has been quite successful over the past three years as sizeable primary surpluses have been sustained and the fall in interest rates has reduced the interest cost of public debt. Fiscal targets have been achieved chiefly by raising revenues which has increased the tax burden; greater emphasis should now be placed on the control of public expenditure. At the same time, core public services such as education, justice, infrastructure and rural development will need to be upgraded. Social security costs may also rise with the planned shift to universal health insurance, and the ambitious administrative decentralization project could cause upward pressure on local spending. Far-reaching rationalization of public expenditures is therefore required to meet the quantitative fiscal targets while achieving the intended improvement in public governance. Turkey has made important steps in this direction with new fiscal laws and regulations but an integrated strategy is necessary to harness their full benefits. This Working Paper relates to the 2004 OECD Economic Survey of Turkey (www.oecd.org/eco/surveys/turkey). <p> Réformer la gestion des dépenses budgétaires en Turquie <p> Les déséquilibres fiscaux ont été une cause majeure de l'inflation forte et de l'instabilité macroéconomique avant la crise de 2000-2001. La consolidation budgétaire a été au cœur de la stabilisation après la crise. Elle a été mise en œuvre depuis trois ans avec des excédents primaires larges, et la baisse des taux d'intérêt a réduit le coût du service de la dette publique. Les objectifs budgétaires ont été atteints principalement par une hausse des revenus, augmentant la pression fiscale, et plus d'attention devra être accordée à l'avenir au contrôle des dépenses. En même temps des services publics majeurs comme l'éducation, la justice, les infrastructures et le développement rural devront être améliorés. Les dépenses de sécurité sociale pourraient aussi augmenter avec le passage annoncé à la couverture médicale universelle, et l'ambitieux projet de décentralisation administrative pourrait accroître les dépenses locales. Une forte rationalisation des dépenses devient donc nécessaire pour atteindre les objectifs quantitatifs de la politique budgétaire tout en améliorant la qualité de la gouvernance publique. La Turquie a fait d'importants pas dans cette direction avec de nouvelles lois et réglementations budgétaires mais une stratégie intégrée est nécessaire pour recueillir pleinement leurs fruits.
    Keywords: Turkey; government expenditure; public sector efficiency; budget systems; intergovernmental relations; new public management
    JEL: E62 H1 H4 H5 H7
    Date: 2005–02–10
    URL: http://d.repec.org/n?u=RePEc:oed:oecdec:418&r=cwa
  2. By: CHRISTA HAINZ; STEFANIE KLEIMEIER
    Abstract: Why do bank grant project finance loans to borrowers in risky countries? Our double moral hazard model predicts that project finance is optimal if the degree of moral hazard of the firm's manager is high and either the project faces high levels of political risk or the bank has influence over the political risk exposure of the project. Using a global and a transition economy sample of project finance loans from 1980 to 2003, we find empirical support of our predictions regarding firm moral hazard and political risk. Regarding the bank's role only the influence of the IFC is significant.
    Date: 2004–01
    URL: http://d.repec.org/n?u=RePEc:rtv:ceiswp:197&r=cwa

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