Empirical Analysis of the Relationship Between Green Growth and Public Expenditures: The Case of Türkiye
Chapter from the book:
Şahin,
M.
&
Önder,
K.
(eds.)
2026.
Theoretical and Empirical Research in Economics and Public Finance.
Synopsis
The acceleration of economic growth has caused some negative impacts on the environment with the industrialization period. In recent years, the emergence of the concept of green growth in the context of economic growth and sustainability has led to a re-evaluation of the importance of government fiscal policies in mitigating environmental degradation. An environmentally conscious spending policy that supports green growth contributes to sustainable development by reducing future environmental costs and increasing productivity. This study tests the relationship between the economic classification of public expenditures and green growth in Turkey between 1999 and 2020 using VAR and Granger causality analysis. The VAR method's variance decomposition findings reveal that green growth is most strongly influenced by current and investment expenditures, followed by other expenditure types. The Granger causality results show that current expenditures, investment expenditures, and trade openness are the causes of green growth.
