The effect of social spending on reducing poverty

Abstract

PurposeThe purpose of this paper is to provide new empirical evidence on the relationship between social expenditure and poverty in Turkey.Design/methodology/approachThere are voluminous studies in the literature and many of which contain condradictory results. The authors use panel error correction models and employ Turkish statistical territorial units data (26 regions) covering the period 2004-2011 in the analysis.FindingsThe authors have found that in the short run, there is a negative relationship between social expenditure and poverty, as expected. In the long run, however, there exists a positive relation between them. The authors utilize expenditure on education as one component of social expenditure, and the authors obtain a negative relationship between education expenditure and poverty, both in the short run and in the long run.Social implicationsPoverty is an important social problem that more studies on this subject should examine various aspects and find policies to alleviate it.Originality/valueLiterature on poverty and social spending are growing and their results are contradictory. However, this paper clearly and significantly provides new empirical evidence on the effect of social spending on reducing poverty using Turkish data. This kind of study is hardly found for developing countries like Turkey. It contributes to the literature.