The Role of the State in the Turkish Economy

  • Nurullah Gur
Chapter

Abstract

The role of the state in economic performance is critical for almost every country. This chapter reviews and assesses the effectiveness of the state in the Turkish economy over the last 15 years. A well-functioning state is key for Turkey to be prosperous and have a larger say in the global economy and for its citizens to have higher living standards. Turkey needs new investments and reforms to escape the middle-income trap. To make this happen, the state should undertake a number of important tasks, from industrial policies to institutional reforms. This chapter argues that making the institutional infrastructure more inclusive, implementing smart industrial policies, and improving the welfare state mechanism are the vital issues the state should focus on to take the Turkish economy to higher steps of the development ladder.

Keywords

State Institutions Fiscal policy Industrial policy 

JEL Codes

H20 H50 O23 O43 

References

  1. Acemoglu, Daron, and Simon Johnson. 2005. Unbundling Institutions. Journal of Political Economy 113 (5): 949–995.CrossRefGoogle Scholar
  2. Acemoglu, Daron, and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity and Poverty. London: Profile Books.Google Scholar
  3. Acemoglu, Daron, Philippe Aghion, and Fabrizio Zilibotti. 2006. Distance to Frontier, Selection, and Economic Growth. Journal of the European Economic Association 4 (1): 37–74.CrossRefGoogle Scholar
  4. Akin, Guzin G., Ahmet F. Aysan, and Yildiran Levent. 2009. Transfomation of the Turkish Financial Sector in the Aftermath of the 2001 Crisis. In Turkey and the Global Economy: Neo-Liberal Restructuring and Integration in the Post-Crisis Era, ed. Ziya Öniş and Fikret Şenses, 73–100. New York: Routledge.Google Scholar
  5. Alesina, Alberto, and Dani Rodrik. 1994. Distributive Politics and Economic Growth. Quarterly Journal of Economics 109 (2): 465–490.CrossRefGoogle Scholar
  6. Amsden, Alice. 1989. Asia’s Next Giant: South Korea and Late Industrialization. New York: Oxford University Press.Google Scholar
  7. Atun, Rıfat, Sabahattin Aydın, Ssarbani Chakraborty, Safir Sümer, Meltem Aran, Ipek Gürol, Serpil Nazlıoğlu, Şenay Özgülcü, Banu Ayar, Uğur Dilmen, and Recep Akdağ. 2013. Universal Health Coverage in Turkey: Enhancement of Equity. The Lancet 382 (9886): 65–99.Google Scholar
  8. Azevedo, Joao Pedro, and Aziz Atamanov. 2014. Pathways to the Middle Class in Turkey: How Have Reducing Poverty and Boosting Shared Prosperity Helped? World Bank Policy Research Working Paper No. 6834.Google Scholar
  9. Babacan, Mehmet. 2010. Whither Axis Shift: A Perspective from Turkey’s Foreign Trade, SETA Policy Report No. 4. Ankara: SETA.Google Scholar
  10. Baumol, William J. 1990. Entrepreneurship: Productive, Unproductive, and Destructive. Journal of Political Economy 98 (5): 893–921.CrossRefGoogle Scholar
  11. Brynjolfsson, Erik, and Andrew McAfee. 2014. The Second Machine Age. In Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York: WW Norton & Company.Google Scholar
  12. Chang, Ha-Joon. 2002. Kicking Away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press.Google Scholar
  13. Coşar, Kerem A., and Banu Demir. 2016. Domestic Road Infrastructure and International Trade: Evidence from Turkey. Journal of Development Economics 118: 232–244.CrossRefGoogle Scholar
  14. Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer. 2002. The Regulation of Entry. Quarterly Journal of Economics 117 (1): 1–37.CrossRefGoogle Scholar
  15. Djankov, Simeon, Tim Ganser, McLiesh Caralee, Ramalho Rita, and Andrei Shleifer. 2010. The Effect of Corporate Taxes on Investment and Entrepreneurship. American Economic Journal-Microeconomics 2: 31–64.CrossRefGoogle Scholar
  16. Düzel, Neşe. 2003. Hükümet Duble Yollari Yapamaz [The Government Cannot Build Divided Highways]. Radikal, January 27. http://www.radikal.com.tr/turkiye/hukumet-duble-yollari-yapamaz-658973/. Accessed 12 June 2017.
  17. Evans, Peter. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton: Princeton University Press.Google Scholar
  18. Hirschman, Albert O. 1958. The Strategy of Economic Growth. New Haven: Yale University Press.Google Scholar
  19. Invest in Turkey. 2015. Turkey Ranks Second in PPP Investment Projects—World Bank. http://www.invest.gov.tr/en-US/infocenter/news/Pages/100615-turkey-ranks-second-in-ppp-infrastructure-projects.aspx. Accessed 10 April 2017.
  20. Istanbul’s Yavuz Sultan Selim Bridge Toll Set to Be $3 Plus VAT. Daily Sabah, August 15, 2016. https://www.dailysabah.com/business/2016/08/15/istanbuls-yavuz-sultan-selim-bridge-toll-set-to-be-3-plus-vat. Accessed 12 Apr 2017.
  21. Karagöl, Erdal, and Nergis Dama. 2015. Geçmişten Günümüze Sosyal Yardımlar [Social Benefits From Past to Present], SETA Analiz No: 139. İstanbul: SETA.Google Scholar
  22. Mazzucato, Mariana. 2013. The Entrepreneurial State: Debunking Public vs. Private Sector Myths. London: Anthem Press.Google Scholar
  23. Mazzucato, Mariana, and Caetano C. Penna. 2016. Beyond Market Failures: The Market Creating and Shaping Roles of State Investment Banks. Journal of Economic Policy Reform 19 (4): 305–326.CrossRefGoogle Scholar
  24. Musgrave, Richard A. 1959. The Theory of Public Finance. New York: McGraw-Hill Book Company, Inc.Google Scholar
  25. North, Douglas. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  26. Öniş, Ziya. 2003. Domestic Politics Versus Global Dynamics: Towards a Political Economy of the 2000 and 2001 Financial Crises in Turkey. Turkish Studies 4 (2): 1–30.CrossRefGoogle Scholar
  27. Patton, Marcie J. 2006. The Economic Policies of Turkey’s AKP Government: Rabbits from a Hat? The Middle East Journal 60 (3): 513–536.CrossRefGoogle Scholar
  28. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  29. Rodrik, Dani. 2008. One Economics, Many Recipes: Globalization, Institutions, and Economic Growth. Princeton: Princeton University Press.Google Scholar
  30. ———. 2009. Industrial Policy: Don’t Ask Why, Ask How. Middle East Development Journal 1 (1): 1–29.CrossRefGoogle Scholar
  31. ———. 2016. Premature Deindustrialization. Journal of Economic Growth 21 (1): 1–33.CrossRefGoogle Scholar
  32. Schneider, Friedrich. 2015. Size and Development of the Shadow Economy of 31 European and 5 Other OECD Countries from 2003 to 2015: Different Developments. Mimeo. Linz: Department of Economics, Johannes Kepler University.Google Scholar
  33. Schwab, Klaus. 2017. The Fourth Industrial Revolution. New York: Crown.Google Scholar
  34. Şeker, Sırma Demir, and Stephen P. Jenkins. 2015. Poverty Trends in Turkey. Journal of Economic Inequality 13 (3): 401–424.CrossRefGoogle Scholar
  35. Selim, Raziye, Günçavdı Ömer, and Ayşe A. Bayar. 2014. Türkiye’de Bireysel Gelir Dağılımı Eşitsizlikleri: Fonksiyonel Gelir Kaynakları ve Bölgesel Eşitsizlikler. TÜSİAD-T/2014-06/554.Google Scholar
  36. Sönmez, Mustafa. 2014. Private-Public Partnership Projects Reach $88 Billion. Hürriyet Daily News, April 28. http://www.hurriyetdailynews.com/private-public-partnership-projects-reach-88-billion.aspx?pageID=238&nID=65626&NewsCatID=344. Accessed 4 Apr 2017.
  37. Tatliyer, Mevlüt, and Nurullah Gur. 2016. The Resilience of the Turkish Economy After the Failed Coup Attempt, SETA Analysis, No: 20. İstanbul: SETA.Google Scholar
  38. Tebaldi, Edinaldo, and Bruce Elmslie. 2013. Does Institutional Quality Impact Innovation? Evidence from Cross-Country Patent Grant Data. Applied Economics 45 (7): 887–900.CrossRefGoogle Scholar
  39. Tiryakioğlu, Murat. 2016. Türkiye Ekonomisinde Geç Kalkınmanın ve Yerli Üretimin Ekonomi Politiği [The Political Economy of Late Development and Domestic Production in Turkish Economy]. Ege Academic Review 16 (2): 177–195.Google Scholar
  40. Todaro, Michael P., and Stephen Smith. 2011. Economic Development. Essex: Pearson Addison Wesley.Google Scholar
  41. Turkey’s Shadow Economy Decreasing in Size. Daily Sabah, 105, January 15, 2015. https://www.dailysabah.com/economy/2015/01/15/turkeys-shadow-economy-decreasing-in-size. Accessed 15 Apr 2017.
  42. Üçkardeşler, Emre. 2015. Turkey’s Changing Social Policy Landscape. Turkish Policy Quarterly 13 (4): 149–161.Google Scholar
  43. Ünay, Sadık. 2010. Economic Diplomacy for Competitiveness: Globalization and Turkey’s New Foreign Policy. Perceptions 15 (3–4): 21–47.Google Scholar
  44. Wade, Robert. 1990. Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton: Princeton University Press.Google Scholar
  45. Weiss, Linda, and John M. Hobson. 1995. States and Economic Development: A Comparative Historical Analysis. Cambridge: Polity Press.Google Scholar
  46. World Bank. 2014. Turkey’s Transition: Integration, Inclusion and Institutions, Main Report No. 90509. Washington, DC: World Bank Group.Google Scholar
  47. Yulek, Murat A. 2016. Industrial Policies and Outcomes: A Comparison of Pre-liberalized Korean and Turkish Economies. Journal of Comparative Asian Development 15 (1): 179–200.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Nurullah Gur
    • 1
  1. 1.Department of Economics and Finance, School of BusinessIstanbul Medipol UniversityIstanbulTurkey

Personalised recommendations