Ozge Kemahlioglu, Particularistic Distribution of Investment Subsidies under Coalition Governments: The Case of Turkey

Governments can provide investment subsidies to private business to stimulate growth and production. Rent seeking by politicians has threatened the success of this strategy especially in developing countries like Turkey. Particularistic allocation of these subsidies by politicians has been a concern, but the influence of electoral incentives on these particularistic exchanges has not been systematically analyzed. Responsibility sharing and credit claiming mechanisms under coalition governments are expected to give different electoral incentives to politicians. Investment subsidies in Turkey between 1992 and 1997 reveal that districts where the coalition partner that is not in control of distributing subsidies is strong have received a relatively smaller number of subsidies.

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