H. Murat Özbilgin is an Economist at the CBRT.
For views, suggestions
Between 2002 and 2015, the average completion time of public investments shortened significantly. This shortening may have stemmed from factors such as the change in the distribution of public investments among sectors over time. However, in the same period, as indicated in the World Bank’s Governance Index, Turkey has been on a trajectory of permanent improvement. This improvement likely played an important role in the shortening of the completion time of public investments.
“The Welfare Impact of Reducing the Duration of Completion of the Public Investment Projects”*,which was published as a CBRT research note in economics in 2016, analyzed the impact of shortened completion time of public investments on social welfare based on the assumption that there has been no significant change in the evaluation criteria such as planning and allocating. According to the model constructed to this end, the welfare gains brought about by a drop in the completion time of public investments from 9 years to 4 years as in the period analyzed, corresponds to a 0.7 percent rise in consumption. The shortened completion time of public investments increases demand for public investments. This, in turn, pushes private sector investments by positive externality and increased productivity. The resulting rise in total capital stock and increased income level brings about increased demand and important welfare gains.
Excerpt from Inflation Report 2016-III, Box 4.3.
Özbilgin, H. Murat (2016). "The Welfare Impact of reducing the Duration of Completion of the Public Investment Projects", CBT Research Notes in Economics No. 16/17, 16 May 2016 –Full text available in Turkish only.