THE EFFECTS OF FOREIGN CAPITAL ON THE TURKISH ECONOMY

Year 1997, Volume: 15 Issue: 1, 53 - 83, 01.07.1997

Ömer Eroğlu John Hudson

Abstract

The
role and effects of foreign aid in the economic development of developing
coun&ies have been controversial issues. Some economic studies of forei51
aid suggest that it is successful, as the other studies find no relationship
between foreign aid and growth rate of output, and suggest that it also retards
economic gowth in developing countries by leading to the sfructural distortions
of the economy, This study has examined empirically the effectiveness and
impact of foreigl aid on the economic development of Turkey from 1963 to 1990.
A simultaneous equations model was developed and Three Stage Least Squares
method was used to assess both
direct and indirect effects of foreign aid on economic development of Turkey.
The empincal results have made an important conuibution to understanding the
role of foreigl aid as a determinant of the behaviotr of savings, gowth,
invesünent, etc. in the Turkish economy. The basic conclusion in this study is
that aid was successful and made a
posifive contribution to the economic development efforts of Turkey over the
period 1963-1990.

Keywords

Foreign Capital Flows, Foreign Aid, Economic Development, Turkish Economy; Single-Period Simultaneous Equation System

References

• Bornschier, Vs, Chase-Dunn, C. and Rubinson, R. (1978), Evidence of the Effects of F Investment and Aid on Economic Growth and Inequality: A Survey of Findings and a Reanalysis:r American Journal of Sociology, vol:84. No:3.