The aim of this study is to test the validity of Wagner’s Law for Turkey in 26 Level-2 regions using panel cointegration and FMOLS methods over the 2004–2011 period data. The studies that testing the validity of Wagner’s Law are generally country-level and the region-level studies are quite a few. In this direction, the relationship between regional economic growth and regional public expenditures was investigated in the study. According to the analysis conducted by the said method, Wagner’s Law is valid in the low income-level regions in the long-run. On the other hand, the results of the empirical analysis also show that Wagner’s Law is not valid in the middle income-level regions, high income-level regions and the whole panel data set.
Wagner’s Law, Public Expenditures, Economic Growth, Panel Data Analysis