Efficiency in Resource Allocation
Kaynakların Etkin Ayrımı (Tahsisi)
Orhan ŞENER
Efficiency in resource allocation is the most important goal of fiscal policy and without fulfillment of this goal, it is impossible to improve the income distribution and macro economic stabilization goals of the modern public finance. This main goals of fiscal policy was successfully applied by the western welfare states, known as social states in Europe, to some certain degree in Turkey in 1960s and 1970s. Whereas, neoliberal monetary policies such as privatization, deregulation and financial liberalization resulted in world wide economic crises since 1980s. For this reason, this study is based on the fiscal policies developed by Richard Musgrave, which became the theoretical back up in establishing social states in Europe in 1960s and in 1970s. Efficiency in resource allocation calls for satisfaction of public and private wants by private and public sectors efficiently. For this reason, we analyze the efficiency conditions to be applied to private and public goods and services. Based on social production possibility curve and social indifference curve analysis equilibrium conditions for both sectors are set. Examples of inefficiencies in private and public sector in Turkey are given in the first part of this article. In the second part of this study, some distorting cases from efficiencies are explained and my suggestions to restore efficiency are stated.
Goals of Fiscal Policy, Efficiency in Resource Allocation, Pareto Efficiency, Social Production Possibility Curve, Social Indifference Curve, Inefficiencies, Social Balance.
Kaynakların etkin ayrımı (tahsisi) maliye politikasının en önemli amacıdır ve bu amaç yerine getirilmediğinde, gelir dağılımını iyileştirme ve kamu maliyesinin makro ekonomik istikrarını sağlama amacını yerine getirme olanağı yoktur. Maliye politikasının bu ana amacı, 1960’lı ve 1970’li yıllarda Avrupa’da refah (sosyal) devletlerinde ve Türkiye’de başarıyla uygulandı. Buna karşın, 1980’li yıllardan beri özelleştirme, serbestleştirme ve finansal liberalizasyon gibi parasal politikalar dünya çapında ekonomik krizlerle sonuçlandı. Bu nedenle, bu makale 1960’lı ve 1970’li yılların teorik dayanağı olan, Richard Musgrave’in geliştirdiği mali politikalara dayanmaktadır. Kaynak ayırımında etkinlik, kamu ve özel sektörde kamusal ve özel ihtiyaçların etkin bir biçimde giderilmesini gerektirir. Bu nedenle, bu çalışmamızda özel ve kamusal mal ve hizmetlere uygulanacak olan denge koşullarını analiz etmekteyiz. Her iki sektör için denge koşulları sosyal üretim olanakları ve sosyal kayıtsızlık eğrileri analizine göre ortaya konulmaktadır. Makalenin ilk kısmında Türkiye’de kamu ve özel sektördeki etkinsizlikler sayılmaktadır. Makalemizin ikinci kısmında ise, her iki kesimi etkinlikten uzaklaştıran bozucu durumlar özlü olarak anlatılmaktadır. Sonuç kısmında ise, ekonominin genelinde etkinliği yerine getirmeye ilişkin önerilerimiz açıklanmaktadır.
Maliye Politikasının Amaçları, Kaynak Ayırımında (Tahsisinde) Etkinlik, Pareto Etkinliği, Sosyal Üretim Olanakları Eğrisi, Sosyal Kayıtsızlık Eğrisi, Etkinsizlikler, Sosyal Denge.
INTRODUCTION
In order to reach to welfare maximization in a mixed economy, three main and four sub goals of the public economy should be fulfilled. Three main goals of the public economy are; efficiency in resource allocation, fairness in income distribution and stabilization. The first two goals (efficiency and equity) are the preconditions to be met to secure the macroeconomic stabilization and it’s sub goals. Sub goals are sustainable growth rate, fulfillment of full employment, maintaining price level stability and balance in international trade. Unless the priority is given to the goal of efficiency in resource allocation, it is impossible to secure the other main and sub goals of the economy. If otherwise, the problems of conflicts and interdependences between the main and sub goals can not be solved. For this reason, a proper fiscal policy should be designated in order to correct the trade-offs between all goals and to encourage the interrelatedness among the functions of the public economy. In this chapter we use some tools of welfare, political and micro economics in order to explain how to reach efficiency in resource allocation. The first part of this paper includes some models in setting the efficiency considerations in resource allocations. Thus, we make use of social possibility curve and social indifference curve analysis in setting the welfare maximization in terms of social balance and governmental involvement in efficiency in resource allocation. In the second part of our study, cases that distorts efficiency in resource allocation, with specific reference to Turkey, will be considered.
I. THE GOAL OF EFFICIENCY IN RESOURCE ALLOCATION
The basic task of economics is to deal with the satisfaction of unlimited scope of human wants with limited resources. Quality and the quantity of the factors of production such as the land, labor, capital and the entrepreneurship are not sufficient enough to produce goods and services along with the unlimited wants of the human beings. Since, unlimited quantity of goods are not produced with the limited factors of production, it calls for allocation of resources efficiently. Thus, the term of efficiency in resource allocation means, proper use of scarce resources both in market and public sectors to satisfy private and public goods. This means that market economy can not secure the efficient resource allocation per se, without governmental intervention. In the broader sense, efficiency in resource allocation calls for distribution of resources between public and private sector in order to satisfy the public and private wants efficiently.
There are many important differences between the satisfaction of private and public (social) wants. Private wants are satisfied by private goods, subject to supply and demand laws of the market mechanism. Prices of the private goods are determined by the supply and demand and it is paid on the voluntary basis. Whereas, satisfaction of the public wants depends on the political decision making process. Voters reveal their preferences (demands) for the public goods through voting process in the election periods. On the other hand the provision (supply) of the public goods is determined by the politicians, bureaucrats, big business and voters. Among these the big business and their pressure groups strongly affect the political decision making process much more than the voters.
