Tax-Spend or Spend-Tax: An Ampirical Survey on Turkey

In general, governments attempt to prepare balanced budgets. But countries’ specific economic conditions often lead to politicians to prepare budgets with deficits. However, if the economic policies can not be sustained, economic crisis become unavoidable. There is a causal relationship between tax revenues and increase in public expenditures. This relation could take the form of tax-spend or spend-tax, or both instruments could be synchronized. This study examines Turkey’s budget in respect to taxation and public expenditures. Examination of data for 1924-2009 suggests that it is better first to collect tax revenues and then plan the public spending program.