Urbanization, Exports and Development of Provinces in Turkey: What Can Government Do?

Although there seems to be a positive relationship between urbanization levels and development levels in terms of provinces in Turkey, this relationship is not clear. This paper suggests that in the cities with high export volumes, the positive relationship between urbanization and economic development is clearer. The aim of this study may be summarized as an attempt to explain the development in provinces in Turkey in terms of exports and to suggest fiscal policies in order encourage development. For that purpose, the dominant export sectors in provinces are examined, and expectations about their future development are discussed. It is observed that the dominant export sectors are freer from their locations in more developed provinces. In order to promote production and exports in less advantaged regions, government may choose to increase public investment directly or private investment by using different fiscal instruments such as tax exceptions and tax allowances.