Importance of human capital and infrastructure for Turkish regions

Regional inequalities in less developed nations have received serious attention in the literature. Many developing countries created developmentalist projects to bring economic development to their least developed parts and to alleviate regional inequalities. The Southeast Anatolian Project (SAP) is another example of a developmentalist experience that aimed to achieve economic development through improvement of infrastructure and human capital levels of the region. In this thesis, these arguments are statistically tested and SAP is evaluated in light of the findings. OLS Regression models are created for 69 Turkish provinces for the years 1990 and 2000. The Literacy Rate 1990, Electricity Consumption Rate 1990, and Telephone Usage 1990 have strong positive prediction powers for GDP per capita 2000. Public Investments 1990 loses its positive significant effect on GDP per capita 2000 once controlling for Literacy Rate 1990 and infrastructure variables. I found no evidence of a positive association of Roads 1990 and Share of Villages with Irrigational Waters 1990 with GDP per capita 2000. Seventy seven percent of variance among Turkish provinces in terms of GDP per capita 2000 has been explained by human capital and infrastructural variables. Literacy Rate 1990, Electricity Consumption Rate 1990, and GDP Per Capita 1990 have strong positive prediction powers for Average Annual GDP per capita Growth between 1990 and 2000. I found no evidence of a positive association of Public Investments 1990, Roads 1990, and Share of Villages with Irrigational Waters 1990 with Average Annual GDP per capita Growth 1990 - 2000. Thirty-three percent of variance among Turkish provinces in terms of Average Annual GDP per capita Growth 1990 - 2000 is explained by human capital and infrastructural variables. Thus, infrastructural and human capital stock of a nation or region can determine its "development capacity" in the near future. SAP substantially improved the levels of these variables in the Southeast Anatolia. Improvement of telephone usage and electricity consumption between 1990 and 2000 was lower in the Southeast Anatolia than it was in the East Anatolia - another less developed region without a developmentalist project like SAP - and in Turkey in general. Improvement in the literacy rate in Southeast Anatolia was higher than the national average.