A Path Towards Sustainable Development From Fiscal Instruments: The Role of Tax Revenues and Public Expenditures

Tax and expenditure policies have a range of economic, social, and environmental objectives. Although these policies are multidimensional, the relevant literature focuses on a single dimension. The long-run aim of public policies, including tax and expenditure policies, is to ensure sustainable development that includes all these dimensions. The sustainable development index is a broad indicator that combines economic, social, and environmental factors, including human development and ecological quality. This study aims to examine the effect of tax revenues and public expenditures on the sustainable development index in Turkiye for the period 1990-2019. According to the study results, while tax revenues affect sustainable development positively, public expenditures affect it negatively. The results of the study support that Turkiye implements its tax policy in a balanced manner towards sustainable development goals and emphasizes that it should review its expenditure policy. This study underscores the importance of aligning both tax and expenditure policies to effectively pursue sustainable development objectives in Turkiye.