The source of the public investment data will be discussed in isolation from other variables, as one of the contributions of the thesis is to provide a dataset for public investment for the years between 1975 and 2001. The data are deflated for
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1987 using “public investment deflators” provided by the State Planning Organisation. The deflator series for public investment data are provided in Appendix- Chapter 2, A.2.1.
2.4.1.1 The Source the Data and the Contribution of the Thesis
The main source of the dataset is the public investment programmes that are published annually by the State Planning Organisation for the years between 1975 and 2001. Data provided in these booklets are raw data, as they provide the annual estimated cost of each project for individual provinces and sectors. It is not possible to use these data without grouping and summing the cost of all projects per sector and per province, which is a cumbersome task.
The State Planning Organisation provides the sum of the cost of the projects per sector, per province for the years between 1990 and 2001 on their website in Excel format. Data for the years between 1975 and 1981 can be found in Kutbay (1982). The data in this source are reported in a slightly different format, and need to be transferred to Excel files to obtain electronic copies of tables identical to those of the State Planning Organisation. However, for the years between 1982 and 1990, only raw data are available. The raw data have been processed and organised in table format. The nature of raw data and how they have been processed is explained in detail in Appendix- Chapter 2, A.2.2.
2.4.1.2 Components of Public Investment
The components of public investment are grouped by the State Planning Organisation as follows: agriculture, mining, manufacturing, energy, communication and transportation, housing, tourism, education, health, and “other public services”. Public investment programmes for the years between 1975 and 2001 reflect the change in economic policies. In Turkey, the years between 1960 and 1980 are called “the planned period”, which means deeper involvement of the government in economic activities in all sectors. Accordingly, public investment projects include investments in factories, facilities for economic activities, infrastructure projects, research and development projects, education projects and health projects. Although it is not possible to measure the amount of public investment in the sub-categories of each component, a visual examination of the public investment programmes gives a crude idea of the characteristics of public investment projects. For instance, the bulk of the investment projects in public manufacturing investment are related to
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construction and operation of factories. Similarly, public investment in housing includes projects that are related to construction of accommodation for staff and housing estates for people.
Public investment projects in mining, agriculture and tourism sectors appear to have the characteristics of infrastructure investment. For example, public investment projects in agriculture include irrigation projects, rehabilitation of swamps, research, and training. This is the case for public investment in tourism, which consists of investment projects for construction of seaports and piers, roads, and research to promote tourism in certain areas. Public investment projects in mining are about searching for minerals, training, and research. However, it should be noted that the mining sector was heavily nationalised in a way that excludes private sector activities until the 1990s, whereas the political reforms to privatise the agriculture sector started in the 1980s (TEKGIDA-İŞ, 2009).
In this study, some components of public investment are renamed for clarity. The phrase “public investment in energy” in the source documents is renamed “public investment in energy infrastructure” in the thesis, because the majority of the projects in this sector appear to be related to infrastructure. The purpose of these projects is the construction of electricity networks, power plants, and research projects. Similarly, public investment in “other public services” is called “public investment in city infrastructure and security” in this study. This is because the investment projects in this group are sub-categorised by the State Planning Organisation as “Other Public Services: Security”, “Other Public Services: Social infrastructure”. Parts of the projects that are related to social infrastructure are investment in construction of clean water pipe networks, and sewage systems. This component includes public investment in administrative services as well.
The names are adopted as suggested by the State Planning Organisation for the components of public investment that reflect the type of investment projects they include. Public investment projects in transportation and communication are comprised of roads, railway, airport, seaport projects, and projects related to telephone lines, mail services, and the national TV channel. Similarly, public investment projects for education and health are related to building schools, hospitals, and relevant facilities, buying equipment, and spending on accommodation for students and staff.
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In summary, public investment programmes related to energy, transportation and communication, city infrastructure and security, education and health can be considered the types of public spending that complement the private sector capital in the overall economy. Public investment projects in agriculture, mining and tourism are more specific to the needs of these sectors, and thus they are more likely to increase the productivity of companies operating in the respective sectors. Public manufacturing and housing investment projects appear to be aimed at carrying out economic activities, which may crowd-out private sector investment. Additionally, the productivity of public agricultural investment, public mining investment, and public tourism investment depends on the economic policies in place at the time, which may restrict private sector production.