The Impacts of Defense, Health and Education Expenditures on Economic Growth in Turkey

The controversial relationship between public expenditures and economic growth has become one of the famous matters of interest, especially following the Great Depression that began in the US in 1929. As well as other economic variables, an increase in the public expenditure of the countries is expected to have significant impacts on those countries’ economic growth performance. Therefore, an annual data set covering the period between the years 1981-2016 is used to determine the relationship of defense, health and education expenditures in the Turkish economy with economic growth. The Fourier unit root test results of the series indicate that economic growth and education expenditure series are stationary in the level, and defense and health expenditure series are stationary in the first difference. The estimation results of ARDL bound test, which is conducted to detect the long-term relationships, indicate that defense, health, and education expenditures are positively related to economic growth at the values ​​of 0.33, 0.17 and 1.33, respectively. In other words, it is determined that economic growth be mostly affected by education expenditures followed by defense and health expenditures, respectively.