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Selected Journal Articles:
Alpaslan, B. (2017). Are Human and Social Capital Linked? Evidence from India. Metroeconomica, 68(4), 859-881.
Abstract: This paper develops a two‐period Overlapping Generations (OLG) model of endogenous growth in which a two‐way relationship between social capital and human capital is studied. In order to illustrate the impact of public policies, the model is calibrated using the data for a low‐income country, India and a sensitivity analysis is reported under different parameter values. Based on the numerical analysis, this paper focuses on possible trade‐offs in the allocation of government spending between two productive components, that is, social capital‐related activities and education. The results of this paper show that an increase in the share of public spending on social capital‐related activities through a cut in spending on education or vice versa entails trade‐offs. However, the trade‐off fades away and the net impact on long‐run growth turns out to be positive for different parameter values in the case where a higher share of spending on education is financed by a cut in spending on social capital‐related activities but a policy in improving social capital accumulation at the expense of education is always detrimental to long‐run growth.
Please click on the following link to access the paper: https://onlinelibrary.wiley.com/doi/abs/10.1111/meca.12147
Also available as a WP: http://hummedia.manchester.ac.uk/schools/soss/cgbcr/discussionpapers/dpcgbcr207.pdf
Ali, A. and Alpaslan, B. (2017). Is There an Investment Motive Behind Remittances? Evidence from Panel Cointegration. Journal of Developing Areas, 51(1), 63-82.
Abstract: Remittance flows have become a vital source of foreign exchange for many developing countries. As a result, the issue of whether they act as complements or substitutes for domestic investment remains an important avenue of research. We know that remittances can act as compensatory transfers, in which case altruistic motives may dominate. We also know that they can act as standard capital flows, where self-interest/investment motivates may dominate. Hence, the motives behind remittance flows can have a direct bearing on how they influence domestic capital formation. In addition, the short-run relationship between domestic investment and remittances may be different from their long-run relationship. In light of these considerations, this paper reexamines whether migrant remittances "crowd in" or "crowd out" investment in developing countries, using a sample of 47 developing and emerging economies. The paper employs recently developed panel cointegration techniques given that these can overcome a number of important issues. First, we explicitly account for cross-sectional dependence, outliers as well as cross-sectional heterogeneity. Second, since our variables of interest may be influenced by various factors emanating from, for example, domestic policy changes or global economic trends, we account for structural breaks and regime shifts. Third, the approaches we employ are robust to endogeneity and many forms of omitted variable bias. Fourth, we examine both the long-run as well as the short-run relationship between remittance flows and domestic investment, employing panel error correction model to uncover the short-run dynamics. Finally, we conduct a panel Granger causality analysis to establish whether these relationships are indeed of a causal nature. The results of the paper show that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself causes more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives. This long-run (causal) two-way relationship is robust to a battery of sensitivity analyses. However, when the sample is disaggregated into regions, the results of the Asian sub-sample are statistically insignificant. We suspect that this is due to the low number of observations from that region. An important policy implication emanating from this study is that developing countries should improve the effectiveness of remittance inflows given that these can augment the rate of capital accumulation.
Please click on the following link to access the paper: https://muse.jhu.edu/article/654395
Also available as a WP: http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-1308.pdf
Alpaslan, B. and Ali, A. (2018). The Spillover Effects of Innovative Ideas on Human Capital. Review of Development Economics, 22(1), 333-360.
Abstract: This paper extends a two‐period overlapping generations model of endogenous growth where the interactions between public infrastructure and human capital with research and development (R&D) activities and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning, which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two‐way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasize the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. However, the findings also show that trade‐offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade‐offs, governments in low‐income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.
Please click on the following link to access the paper: https://onlinelibrary.wiley.com/doi/abs/10.1111/rode.12344
Also available as a WP:
https://crawford-prod.anu.edu.au/sites/default/files/2025-03/59_2016_alpaslan_ali_0.pdf
Agenor, P-R and Alpaslan, B. (2018). Infrastructure and Industrial Development with Endogenous Skill Acquisition. Bulletin of Economic Research, 70(4), 313-334.
Abstract: The link between infrastructure and industrial development is studied in an OLG model with endogenous skill acquisition. Industrial development is defined as a shift from an imitation‐based, low‐skill economy to an innovation‐based, high‐skill economy, where ideas are produced domestically. Imitation generates knowledge spillovers, which enhance productivity in innovation. Changes in industrial structure are measured by the ratio of the variety of imitation‐ to innovation‐based intermediate goods. The model also distinguishes between basic infrastructure, which helps to promote learning by doing and productivity in imitation activities, and advanced infrastructure, which promotes knowledge networks and innovation. Numerical experiments, based on a parameterized version for a stylized low‐income country, show that changes in the level and composition of public investment in infrastructure may have significant effects on the structure of the labour force and the process of industrial development.
Please click on the following link to access the paper: https://onlinelibrary.wiley.com/doi/abs/10.1111/boer.12166
Also available as a WP: http://hummedia.manchester.ac.uk/schools/soss/cgbcr/discussionpapers/dpcgbcr195.pdf
Alpaslan, B. and Yildirim, J. (2020). The Missing Link: Are Individuals with More Social Capital in Better Health? Evidence from India. Social Indicators Research, 150(3), 811-834.
Abstract: This paper extends a two-period Overlapping Generations (OLG) model of endogenous growth in which associations between human capital, social capital, and health outcomes are critically examined for a low income country, India. If individuals with higher level of human capital can build strong social ties and have more robust social networks, they are then less likely to have health problems and are therefore physically healthier. In an attempt to test the so-called relationship between the variables in question, a unique dataset, where micro-level data from the World Values Survey (WVS) and regional-level macro data from the Central Statistics Office of India were both utilized, was accessed. A three-equation model has been then estimated using the conditional mixed-process (CMP) method in order to address endogeneity issues explicitly. Our estimation results provide important insights into the theoretical thesis in several ways. Firstly, human capital has a favourable impact on social capital, which in turn enhances self-reported health. Secondly, we provide a comparison of three main experiments: an increase in the share of public spending by region on education, social capital-enhancing activities, and health. The results confirm the positive effect of an increase in each form of government spending on outcome variables. Thirdly, the correlation coefficient between disturbances of these three equations turns out to be statistically significant, suggesting that there are unobserved factors, which can affect self-reported health, social capital and human capital variables.
Please click on the following link to access the paper: https://link.springer.com/article/10.1007/s11205-020-02343-6
Also available as a WP:
Yildirim, J., Alpaslan, B. and Eker, E. E. (2021). The Role of Social Capital in Environmental Protection Efforts: Evidence from Turkey. Journal of Applied Statistics, 48: 13-15, 2626-2642.
Abstract: The root causes of environmental problems are not only ecological. They are also linked to the collective choices of individuals. Humans may control environmental degradation by developing strategies through collective action. The existing literature has recognized the role and importance of social capital in natural resource management. Several studies provide empirical evidence that higher levels of social capital may positively affect individuals' behavior towards natural resources management. This study is therefore an attempt to investigate the environmental quality impacts of social capital and central government expenditures on environmental protection, taking spatial dimension into account from 2009 to 2017 for Turkey. The variable for environmental degradation is particulate matter (PM10), whereas the social capital variable is the per capita number of NGOs. A general-to-specific approach has been adopted where spatial variations in the relationships have been examined with a dynamic spatial Durbin model, using the panel data at NUTS3 level. The empirical results do not support the validity of an EKC, rather a U-shaped EKC is validated, which exhibits spatial dependence. Estimation results show that industrial production has detrimental effects on the environment, while social capital improves it. The central government expenditures on environmental protection are effective in the abatement of pollution, and its effectiveness is enhanced when social capital is controlled. In addition to spatial spillover effects, our results show the presence of strong path dependency; that is, there is a certain pollution inertia. Moreover, environmental protection policies would be more effective if social capital levels are improved.
Please lick on the following link to access the paper: https://www.tandfonline.com/doi/full/10.1080/02664763.2020.1843609
Alpaslan, B., Lim K. Y., and Song Y. (2021): "Growth and Welfare in Mixed Health System Financing with Physician Dual Practice in a Developing Economy: A Case of Indonesia". International Journal of Health Economics and Management, 21, 51-80.
Abstract: We present a growth model with micro-foundations of a mixed health care system and physician dual-practice, to analyze for welfare-optimal government financing strategy for a mixed health system in developing countries. Calibrating the model for Indonesia, we find that a government subsidy to private health care is both growth- and welfare-enhancing, whereas it is more effective for the government to invest in health infrastructure instead of a public-sector “rewarding” policy in raising government physicians’ wage if its goal is to improve physician effort in public practice. Indeed, for the “rewarding” policy, a dynamic trade-off in growth is found, which is not previously documented in the literature. We also find the model to produce two regimes with different welfare-optimal health financing (a “normal” regime and a low public-sector congestion regime). In the former, welfare-optimal health financing strategy appears to be promoting private health subsidy at the expense of public-sector physician wages. In the latter, the opposite is welfare-optimal.
Please click on the following link to access the paper: https://link.springer.com/article/10.1007/s10754-020-09289-9
Also available as a WP:
https://crawford-prod.anu.edu.au/sites/default/files/2025-01/5_2019_alpaslan_lim_song_0.pdf
Moreira, E. P. and Alpaslan, B. (2023): "Algeria: A Three-Sector Macro-Fiscal Model for Debt Sustainability and Growth Policy Analysis", Review of Development Economics, 27(1), 499-524.
Abstract: In this paper, we present a Dynamic General Equilibrium (DGE) model to address the macro-fiscal vulnerabilities and the effects of fiscal policy on growth and employment in Algeria. We first discuss the baseline scenario over the period 2021-2040. According to our baseline results, without fundamental changes in fiscal policies even relatively high growth will not be sufficient to put public debt on a sustainable path. We then conduct four experiments and assess their impact on fiscal accounts, growth, and unemployment; an increase in the efficiency of public spending on infrastructure investment, a gradual reduction in the share of noninterest government spending in GDP, the same gradual reduction in spending combined with a permanent increase in the share of investment in infrastructure in total noninterest government expenditure, and a composite fiscal reform program which combines these individual policies, respectively. The results suggest that public debt sustainability can be achieved, and growth and employment can be promoted, as long as an ambitious fiscal reform program, involving tax, spending, and governance reforms is implemented. Importantly, our quantitative analysis shows that with a well-designed fiscal program, there may be no trade-off between fiscal consolidation and economic growth.
Please click on the following link to access the paper: https://onlinelibrary.wiley.com/doi/10.1111/rode.12930
Also available as a WP:
Yildirim, J., Alpaslan, B., Karakas-Aydinbakar, A., and Hibiki, A. (2024): "The Effect of Environmental Degradation on Self-reported Health: The Role of Renewable Energy Consumption", Environmental Science and Pollution Research, 31, 343-356.
Abstract: Although there are a number of studies in the literature that have explored the effect of environmental degradation on the subjective well-being and life satisfaction, no previous study has addressed the role of renewable energy consumption in examining the effect of environmental degradation on self-reported health. To this end, we employ a conditional mixed process (CMP) model, using a unique dataset that combines both micro-level data from the 6th (2010–2014) and 7th (2017–2022) Waves of the World Values Survey (WVS) database and macro-level data from the World Bank. Our study has several important empirical findings. First, while environmental degradation deteriorates self-reported health, social capital and health expenditure have a positive impact on self-reported health. Second, the share of renewable energy consumption in total final energy consumption has a statistically significant negative impact on environmental degradation. Third, urbanization has a deteriorating effect on environmental quality and the total number of people increases environmental degradation.
Please click on the following link to access the paper: https://doi.org/10.1007/s11356-023-30981-z
Adoho, F. M. and Alpaslan, B. (2024): "Gender Equality, Economic Growth and Poverty in Côte d'Ivoire: A Quantitative Analysis", Structural Change and Economic Dynamics, 68, 371-383.
Abstract: In this paper, we develop a three-period gender-based Overlapping Generations (OLG) model of economic growth for Côte d'Ivoire by endogenizing life expectancy and linking growth and poverty. We then calibrate the model using the country-specific data to illustrate the role of public policies in the model, and its implications for long-term growth, gender equality, and poverty in Côte d'Ivoire. To this end, we discuss three sets of quantitative experiments: broad-based development policies (increase in education spending and infrastructure investment, and governance reform), gender-based policies (reduction in gender bias in the market place, increase in women's bargaining power, and reduction in family bias against girls' education), and a composite reform program (combination of pro-growth, pro-gender policies). Overall, our findings suggest that Côte d'Ivoire could achieve better growth and poverty outcomes if the country could implement a composite reform program that includes comprehensive development and gender-based policies.
Please click on the following link to access the paper: https://doi.org/10.1016/j.strueco.2023.10.008
Also available as a WP:
Alpaslan, B. and Kurtulmuslar, M. (2024): " The Myth of Meritocracy: Does Meritocracy Promote Economic Growth? Evidence from Turkey", Journal of Development Economics (published online).
Abstract: This paper makes a contribution to the literature in a number of important ways: First, this paper offers a two-period OLG model of endogenous growth that incorporates both meritocracy and social capital: in our theoretical framework, meritocracy can promote social capital. Second, this paper provides a measure of the meritocracy degree to determine the extent to which there is an incidence of nepotism in the society this is because meritocracy is the opposite of nepotism, that is, the lower meritocracy degree, the higher nepotism is or the other way around. Third, this is the first study that has provided a solid evidence base for Turkey in linking the notion of meritocracy with social capital and explaining its implications for long-run growth. To this end, we calibrate our theoretical model based on a combination of theoretical restrictions and empirical observations. We conduct several policy experiments. We first consider an increase in the share of public spending on social capital building activities and infrastructure investment under two scenarios: each increase is financed by a cut in either other items or education. We also run a policy experiment associated with a decrease in the share of non-meritocratic political elites. In general, the findings of our policy experiments show that a higher meritocracy degree can promote social capital and therefore long-run growth. However, when an increase in the share of government spending on either social capital building activities or infrastructure investment is financed by a cut in education, in the benchmark case, the net impacts on long-run growth turn out to be negative or very small due to the trade-off effect because it seems that the cut in the share of government spending on education is detrimental to growth.
Please click on the following link to access the paper: https://onlinelibrary.wiley.com/doi/10.1111/rode.13218
Also available as a WP:
https://crawford-prod.anu.edu.au/sites/default/files/2025-01/47_2024_alpaslan_kurtulmuslar.pdf
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