THE EFFECT OF TAX INCENTIVES ON HUMAN DEVELOPMENT İN OECD MEMBER COUNTRIES

Abstract

Human development is one of the common goals that all countries want to achieve. Countries frequently use many economic and non-economic tools to achieve this goal. This study seeks to answer the question of whether the tax incentives offered by countries, especially to attract foreign investors, are effective on human development. The study covers 31 member countries of the Organization for Economic Co-operation and Development (OECD) and the period between 2010-2018. The relationship between the variables specified in the study was examined with the System Generalized Method of Moments (System GMM), one of the dynamic panel data estimation methods. According to the analysis findings, tax incentives have a positive and significant effect on human development.

Keywords

• Tax Incentives
• Human Development
• System GMM

OECD ÜYESİ ÜLKELERDE VERGİ TEŞVİKLERİNİN İNSANİ KALKINMA ÜZERİNE ETKİSİ

Abstract

İnsani kalkınma tüm ülkelerin ulaşmak istediği ortak amaçlardan bir tanesidir. Ülkeler bu amaca ulaşabilmek için iktisadi olan ve olmayan çok sayıda araca sıklıkla başvurmaktadır. Bu araçlardan bir tanesi de vergi teşvikleridir. Bu çalışma kapsamında ülkelerin özellikle yabancı yatırımcıları getirebilmek amacıyla sunmuş oldukları vergi teşviklerinin insani kalkınma üzerinde etkili olup olmadığı sorusuna yanıt aranmaktadır. Çalışma 31 Ekonomik İşbirliği ve Kalkınma Örgütü (OECD) üyesi ülkeyi ve 2010-2018 dönem aralığını kapsamaktadır. Çalışmada belirtilen değişkenler arasındaki ilişki dinamik panel veri tahmin yöntemlerinden Sistem Genelleştirilmiş Momentler Yöntemi (Sistem GMM) ile incelenmiştir. Analiz bulgularına göre vergi teşvikleri, insani kalkınma üzerinde pozitif ve anlamlı bir etkiye sahiptir.

Keywords

• Vergi Teşvikleri
• İnsani Kalkınma
• Sistem GMM

Ethical Statement

Çalışmada bilimsel araştırma ahlakına uygun hareket edilmiştir. Ayrıca çalışmada panel veri analizi kısmında yararlanılan veriler, uluslararası kuruluşların yayınlamış olduğu verilerden elde edilmiştir. Bu sebeple etik kurul onayına gerek yoktur.

References

1. Acemoğlu, D. ve Robinson, J. A. (2013). Ulusların Düşüşü: Güç, Zenginlik ve Yoksulluğun Kökenleri. (Çev. Faruk Rasim Velioğlu). İstanbul: Doğan Egmont Yayıncılık.
2. Acemoğlu, D. ve Robinson, J.A. (2008). The Role of Institutions in Growth and Development (Vol. 10). Washington DC: World Bank.
3. Aksoy, E. (2024). “Analysis of the Effect of Reduced Corporate Income Tax Implementation on Employment in Turkey”. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, 11(2), 519-534.
4. Ahn, S.C. ve P. Schmidt, (1995). “Efficient Estimation of Models For Dynamic Panel Data”. Journal of Econometrics 68, 5–27.
5. Ali, Abdelhakim B. Zouaghi, L. (2022). “The Effect of Taxation on Financial Performance: The Case Of Tunisian Companies”. Researc Square.
6. Akbar, M., Hussain, A., Akbar, A. ve Ullah, I. (2021). “The dynamic association between healthcare spending, CO2 emissions, and human development index in OECD countries: evidence from panel VAR model”. Environment, Development and Sustainability, 23(7), 10470-10489.
7. Anand, S. ve Sen, A. (1994). Human Development Index: Methodology and Measurement. New York. https://hdr.undp.org/system/files/document s/oc12pdf.pdf Erişim Tarihi: 27.05.2023
8. Anderson, T. W. ve Hsiao, C. (1981). “Estimation of Dynamic Models with Error Components.” Journal of the American Statistical Association, 76 (375), 598–606.

9. Anderson, T. W., ve Hsiao, C. (1982). “Formulation and Estimation Of Dynamic Models Using Panel Data”. Journal of Econometrics, 18(1), 47-82.
10. Arellano, M. (2003). Panel Data Econometric. Oxford University Press. Arellano, M. ve Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277-297.
11. Arellano, M. ve Bover, O. (1995). “Another Look at the Instrumental Variables Estimation of Error Component Models.” Journal of Econometrics, 68, 29-51.
12. Appiah-Kubi, S. N. K., Malec, K., Phiri, J., Maitah, M., Gebeltová, Z., Smutka, L., Blazek, V., Maitah, K., ve Sirohi, J. (2021). “Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa." Sustainability 2021, Vol. 13, Page 8661, 13(15), 8661. https://doi.org/10.3390/SU13158661
13. Baiardi, D., Profeta, P., Puglisi, R. ve Scabrosetti, S. (2019). “Tax Policy and Economic Growth: Does It Really Matter?,” Int Tax Public Finance, 26: 282–316. https://doi.org/10.1007/ s10797-018-9494-3.
14. Balcı, E. ve Özcan, S. (2019). “İnsani Gelişmişlik ve Büyüme Arasındaki İlişki: OIC Ülkeleri Üzerinde Bir Analiz”. Sakarya İktisat Dergisi, 8(3), 222-235.
15. Baltagi, B. H. (2005). Econometric Analysis of Panel Data. 3.Ed., John Wiley&Sons.
16. Baughman, R. A. ve Duchovny, N. (2016). “State Earned Income Tax Credits and The Production of Child Health: İnsurance Coverage, Utilization, and Health Status”. National Tax Journal, 69(1), 103–132.
17. Baum, C. F., Schaffer, M. E. ve Stillman, S. (2003). “Instrumental Variables and GMM: Estimation And Testing”. The Stata Journal, 3(1), 1-31.
18. Bednar, S. ve Gicheva, D. (2013). “Tax Benefits For Graduate Education: Incentives For Whom?.” Economics of Education Review, 36, 181-197.
19. Becht, C. (2019). Apprenticing America: The Effects of Tax Credits for Registered Apprenticeship Programs (Doctoral dissertation, Georgetown University).
20. Blundell, R. ve Bond, S., (1998). “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models”. Journal of Econometrics, 87, 115-143.
21. Chung, J. ve Yoon, S. (2023). “Effects of Tax Incentive Policies for Land Use on Local Socioeconomic Conditions: A Case of Tax Policies for Urban Regeneration Projects in Republic of Korea.” Land, 12(9), 1801.
22. Courtemanche, C. ve He, D. (2009). "Tax Incentives and The Decision to Purchase Long-Term Care Insurance." Journal of Public Economics 93, no. 1-2: 296-310.
23. Di Novi, C., Marenzi, A. Ve Rizzi, D. (2018). “Do Healthcare Tax Credits Help Poor-Health Individuals on Low Incomes?”. The European Journal of Health Economics, 19, 293-307.
24. Domazet, I. ve Marjanović, D. (2017). Tax Incentives as a Factor of Economic Growth. Review of Applied Socio-Economic Research, 93-107.
25. Eichfelder, S., Jacob, M. ve Schneider, K. (2023). “Do Tax Incentives Affect İnvestment Quality?.” Journal of Corporate Finance, 80, 102403.
26. Elsayed, M. A. (2016). “The Impact of Education Tax Benefits on College Completion.” Economics of Education Review, 53, 16-30.
27. Erdem, E. ve Çelik, B. (2019). “İnsani Gelişme ve Ekonomik Büyüme İlişkisi: Bazı Afrika Ülkeleri Üzerine Bir Uygulama. Bingöl Üniversitesi” Sosyal Bilimler Enstitüsü Dergisi, 9(17), 13-36.
28. Evans, W. N. ve Garthwaite, C. (2014). “Giving Mom A Break: The Impact of Higher EITC Payments on Maternal Health”. American Economic Journal: Economic Policy, 6(2), 258–290
29. Fleisher, B., Li, H., ve Zhao, M. Q. (2010). “Human Capital, Economic Growth, and Regional Inequality in China”. Journal of Development Economics, 92(2), 215-231.
30. Fraser Institute (2024). Appendix Explanatory Notes and Data Sources. https://www.fraserinstitute.org/sites/default/files/economic-freedom-of-the-world-2013-appendix.pdf Erişim Tarihi: 15.07.2024.
31. Gumus, G. ve Regan, T. L. (2013). Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 50(4), 275-295.
32. Hansen, L. P. (1982). “Large Sample Properties of Generalized Method of Moments Estimators”. Econometrica, 50, 1029-1054.
33. Hanson, J. K. (2015). “Democracy and State Capacity: Complements or Substitutes?.” Studies in Comparative International Development, 50, 304-330.
34. Haq, M. U. (1995). Reflections On Human Development. UK: Oxford University Press.
35. Haq, M.U. (1999). Human Development in South Asia 1999: theCcrisis of Governance. Oxford University Press.
36. HDR (Human Development Report), (1990). Defining and Measuring Human Development, UNDP, Oxford University Press, Oxford.
37. He, F., Zeng, X., Xue, J. ve Xu, J. (2024). “The Hidden Cost of Corporate Tax Cuts: Evidence from Worker Health in China”. China Economic Review, 86, 102202.
38. Heritage Foundation (2023). Methodology. https://www.heritage.org/index/ pdf/2023/book/02_2023_IndexOfEconomicFreedom_METHODOLOGY.pdf Erişim Tarihi: 27.04.2023.
39. Hoxby, C. M. (1998). “Tax Incentives for Higher Education.” Tax Policy and the Economy. 49-81.
40. Hsiao, C. (2003). “Analysis Of Panel Data”, Second Edition, New York: Cambridge University Press. Huang, J., Li, Y., Wang, S., ve Zhang, J. (2024). “Tax Credits for Employee Education Expenses and Firm-Specific Human Capital Accumulation: Evidence from China”. International Review of Financial Analysis, 96, 103731.
41. Jahan, S. (2002). Measuring Living Standard And Poverty: Human Development İndex As An Alternate Measure. University of Massachusetts Political Economy Research Institute. URL: http://www. umass. edu/peri/pdfs/glw_jahan. pdf.
42. Karayılmazlar, E. ve Göde, B. (2017). “Vergi Yükünün Ekonomik Büyüme Üzerine Etkisi.” Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 10(4): 131-142.
43. Klemm, A. (2010). “Causes, Benefits, and Risks of Business Tax Incentives”. International Tax and Public Finance, 17, 315-336.
44. Klemm, A. ve Parys, S.V. (2009). Empirical Evidence on the Effects of Tax Incentives. IMF Working PaperWP/09/136.
45. Latif, M. I., Rahman, H., Ahmad, H., Ahmad, F., Khurshid, M. M.ve Shafique, M. N. (2019). “Estimation of Laffer Curve: Evidence from Pakistan”. Sarhad Journal of Management Sciences, 5(1), 103–112. https://doi.org /10.31529/SJMS.2018.5.1.7.
46. Lawal, B.A, Oyetunji, O.T., Soladoye, A., Lawal, B.O ve Alagbe, E.A. (2022). “Tax Incentives and Business Growth: Experience from Listed Manufacturing Firms in Nigeria”. African Multidisciplinary Journal of Development (AMJD) 11(2), 17-29.
47. Leuven, E. ve Oosterbeek, H. (2004). “Evaluating the Effect of Tax Deductions on Training”. Journal of Labor Economics, 22(2), 461-488.
48. Liu, Y. ve Mao, J. (2019). “How Do Tax Incentives Affect Investment and Productivity? Firm-Level Evidence from China.” American Economic Journal: Economic Policy, 11(3), 261–291.
49. Long, B. T. (2004). The Impact of Federal Tax Credits For Higher Education Expenses. in College Choices: The Economics of Where to Go, When to Go, and How to Pay for it (pp. 101-168). University of Chicago Press.
50. North, D. C. (1990). Institutions, Institutional Change, and Economic Performance. New York: Cambridge University Press.
51. Nugraeni, U. ve Saptono, P. B. (2023). “Analysis the Implementation of Indonesian Supertax Deduction Incentive for Apprenticeship and Training Programs”. Interdisciplinary Social Studies, 2(8), 2249-2267.
52. Prillaman, S. A. ve Meier, K. J. (2014). “Taxes, Incentives, And Economic Growth: Assessing the Impact of Pro-Business Taxes on US State Economies”. The Journal of Politics, 76(2), 364-379.
53. PRS (2022). The ICRG Methodology. https://www.prsgroup.com/wp-content/uploads/2022/04/ICRG-Method.pdf. Erişim Tarihi: 15.07.2024.
54. Putnam, R. D. (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton University Press.
55. Roodman, D. M. (2009a). “A Note on the Theme of Too Many Instruments.” Oxford Bulletin of Economics and Statistics, 71, 135–158.
56. Roodman, D. M. (2009b). “How to Do xtabond2: An Introduction to Difference and System GMM in Stata.” The Stata Journal, 9(1), 86-136.
57. Roodman, D. (2006). How to do xtabond2: an Introduction to “Difference” and “System” GMM in Stata. The Center for Global Development Working Paper Series, No. 103.
58. Oghogho, G. ve Amibor, N. H. (2023). “Tax Incentive and Economic Growth.” American Research Journal of Contemporary Issues, 1(2), 37-46.
59. Okoth, E. (2023). “Effects of Tax Incentives and Subsidies on Economic Growth in Developing Economies.” International Journal of Research and Innovation in Social Science (Ijriss), 7. 567-581.
60. Olowo, S. O., Anisere-Hammed, R. A. ve Adewole, A. O. (2020). “Effect of Tax İncentives on The Growth and Development of Manufacturing Firms in Nigeria.” African Journal of Accounting and Financial Research, 3(1), 77-84.
61. Siyanbola, T. T., Adedeji, S. B., Adegbie, F. F. ve Rahman, M. M. (2017). “Tax Incentives and Industrial/Economic Growth of SubSaharan African States. Journal of Advanced Research in Business and Management Studies, 7(2), 78-90.
62. Sargan, J. D., (1958). “The Estimation of Economic Relationships Using Instrumental Variables.” Econometrica, 26, 393–415.
63. Schanz, D., Keller, S., Dinkel, A., Fritz, J. ve Grosselfinger, C. (2024). The tax Attractiveness Index. https://www.tax-index.org/ Erişim Tarihi: 15.08.2023. . (2017). The tax Attractiveness Index: Methodology. Available at SSRN 3013603. Sen, A.K. (1999). Development As Freedom. Anchor Books, New York.
64. Shettigar, J., Misra, P., Sanyal, P. K. ve Kawinga, A. (2023). “The Impact of Tax Reforms on Human Development Index: Literature Review Approach.” International Journal of Social Welfare. 757-776. DOI: 10.1111/ijsw.12629.
65. Stavrunova, O. ve Yerokhin, O. (2014). "Tax Incentives and the Demand for Private Health Insurance." Journal of health economics 34 (2014): 121-130.
66. Sun, C., Zhan, Y. ve Du, G. (2020). “Can Value-Added Tax Incentives of New Energy Industry Increase Firm's Profitability? Evidence from Financial Data of China's Listed Companies”. Energy Economics, 86, 1-13.
67. Tian, B., Lin, C., Zhang, W., ve Feng, C. (2022). Tax Incentives, on-the-Job Training, and Human Capital Accumulation: Evidence from China. China Economic Review, 75, 101850.
68. Todaro, Michael P. (1992). Human Development Report 1992. Population and Development Review, Vol.18, No.2, June 1992: 359- 363.
69. Topal, M. H. (2016). “Teşvik Politikalarının Gerekçeleri ve Etkinliği: Kuramsal Bir Yaklaşım”. Uluslararası Bilimsel Araştırmalar Dergisi, 1(2), 35-51.
70. Turner, N. (2011). “The Effect of Tax-Based Federal Student Aid on College Enrollment”. National Tax Journal, 64(3), 839-861.
71. UNDP (1990). United Nations Development Programme. Human Development Report (New York, Oxford University Press). https://www.berjournal.co m/wpcontent/plugins/downloadsmanager/upload/ BERJ12221Article4p.307-318.pdf Erişim Tarihi:15.07.2024
72. Van-Parys, S. ve James, S. (2010). “The Effectiveness of Tax İncentives in Attracting Investment: Panel Data Evidence From The CFA Franc Zone.” International Tax and Public Finance, 17, 400-429.
73. Vijesandiran, S. ve Selvarasa, P. (2018). “Effects of Fiscal Policy on Human Development in Sri Lanka: An Empirical Analysis”. Journal of Smart Economic Growth, 3(3), 1-36.
74. Wang, J., Fan, W. ve Wang, Z. (2024). “Tax Incentives and Earnings Management: A Study Based on Accelerated Depreciation Policy in China.” Economic Analysis and Policy, 81, 281-296.
75. World Bank (2025a). GDP Per Capita Growth (Annual %) https://data.worldban k.org/indicator/NY.GDP.PCAP.KD.ZG Erişim Tarihi:02.04.2025.
76. World Bank (2025b). Government Expenditure on Education, total (% of GDP) https://data.worldbank.org/indicator/SE.XPD.TOTL.GD.ZS Erişim Tarihi: 02.04.2025.
77. World Bank (2025c). Current Health Expenditure (% of GDP) http://data.worldb ank.org/indicator/SH.XPD.CHEX.GD.ZS Erişim Tarihi:02.04.2025.
78. World Bank (2025d). General Government Final Consumption Expenditure (% of GDP) https://data.worldbank.org/indicator/NE.CON.GOVT.ZS Erişim Tarihi:02.04.2025.
79. Yaman, H. (2021). “İnsani Gelişme, Ticari Dışa Açıklık ve Ekonomik Büyüme Dinamikleri: G-20 Ülkeleri Üzerine Bir İnceleme”. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, (69), 121-134.
80. Yandes, J. ve Sunarya, A. (2024). “Implementation of Tax Incentives on Issuers' Financial Ratios: Reduction and Reaction.” Ilomata International Journal of Tax and Accounting, 5(2), 437-452.
81. Zolt, E. (2015). Tax Incentives: Protecting the Tax Base. https://static.un.org/esa/ffd/wp-content/uploads /2015/04/2015TIBP_ PaperZolt.pdf Erişim Tarihi: 06.07.2024.