The Role of Institutional Quality in the Relationship Between Tax Expenditures and Income Inequality

Year 2025, Volume: 10 Issue: 28, 902 - 916

Uğur Çiçek

https://doi.org/10.25204/iktisad.1771200

Abstract

This study analyses whether institutional quality has an impact on the relationship between tax expenditure and income distribution. To this end, annual data from ten countries — Germany, the USA, Argentina, Australia, Brazil, France, India, the UK, Canada, and Mexico — for the period 2006–2022 were used, and the panel regression method was applied. The dependent variable, income inequality, is measured by the Gini index. Tax expenditure is represented by the share of foregone tax revenues in Gross Domestic Product. The analysis reveals that tax expenditures directly increase income inequality. However, the results differ when institutional quality indicators are included in the model. In countries with strong institutions in areas such as corruption control, government effectiveness, regulatory quality, the rule of law, and democratic accountability, the inequality-increasing effect of tax expenditures weakens. Conversely, this effect reverses and becomes inequality-reducing when political stability is high. The findings suggest that fiscal policies aimed at reducing the negative impact of tax expenditures on income inequality should be integrated with institutional reforms.

Keywords

tax expenditure , institutional quality , income inequality

Vergi Harcamaları ve Gelir Eşitsizliği İlişkisinde Kurumsal Kalitenin Rolü

Abstract

Bu çalışmada, vergi harcamaları ile gelir dağılımı arasındaki ilişkide kurumsal kalite unsurunun etkisinin olup olmadığı incelenmektedir. Bu amaçla 2006–2022 döneminde Almanya, ABD, Arjantin, Avustralya, Brezilya, Fransa, Hindistan, İngiltere, Kanada ve Meksika’dan oluşan on ülkenin yıllık verileri kullanılmış ve panel regresyon yöntemi uygulanmıştır. Gelir eşitsizliği bağımlı değişkeni, Gini endeksi ile ölçülmektedir. Vergi harcaması ise, vazgeçilen vergi gelirlerinin Gayri Safi Yurtiçi Hasıla içindeki payı ile temsil edilmiştir. Analiz sonuçları, vergi harcamalarının doğrudan etkisinin gelir eşitsizliğini artırıcı yönde olduğunu göstermektedir. Ancak kurumsal kalite göstergeleri modele dâhil edildiğinde sonuçlar farklılaşmaktadır. Yolsuzluğun kontrolü, hükümet etkinliği, düzenleyici kalite, hukukun üstünlüğü ve demokratik hesap verebilirlik gibi alanlarda güçlü kurumlara sahip ülkelerde vergi harcamalarının eşitsizliği artırıcı etkisi zayıflamakta, siyasi istikrarın yüksek olduğu ortamlarda ise bu etki tersine dönerek eşitsizliği azaltıcı bir işlev kazanmaktadır. Bulgular, vergi harcamalarının gelir eşitsizliği üzerindeki olumsuz etkisini azaltmaya yönelik olarak uygulanacak maliye politikalarının kurumsal reformlarla bütüncül biçimde ele alınması gerektiğini göstermektedir.

Keywords

vergi harcamaları , kurumsal kalite , gelir eşitsizliği

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