Industrial Policy in Turkey: Rise, Retreat and Return

This book examines how industrial policies have evolved in Turkey compared to other emerging markets, arguing that uncertainty-amplifying interventions of the state due to its weak capacity have conditioned their effectiveness. It also poses broader conceptual questions about the role of the state in economic development.

Format: Hardback
Length: 200 pages
Publication date: 31 December 2023
Publisher: Edinburgh University Press

When numerous governments in advanced or emerging markets are pursuing various forms of industrial policy and protectionism, this book delves into the evolution of such policies in Turkey compared to other emerging markets. Adopting a historical-institutional political economy framework, the book explores the primary factors, both domestic and global, that have shaped the rise, retreat, and subsequent resurgence of industrial policy in Turkey. It contends that the effectiveness of industrial policy in Turkey is not solely attributed to state intervention in the market but rather to uncertainty-amplifying interventions by the state due to its limited capacity. Furthermore, the book raises broader conceptual questions of relevance to other emerging markets regarding the role of the state in economic development.

The historical background of industrial policy in Turkey is examined, tracing its roots back to the early 20th century. The book highlights the role of the state in promoting industrialization during the early stages of Turkey's development, particularly through the establishment of state-owned enterprises and the implementation of import substitution policies. However, the book also notes that these policies were eventually abandoned in the 1980s due to the economic crisis and the rise of globalization.

The rise, retreat, and return of industrial policy in Turkey are examined in detail. The book identifies several factors that contributed to the resurgence of industrial policy in recent years, including the need to create jobs, promote domestic production, and address the country's trade deficit. The book also explores the challenges faced by the Turkish government in implementing industrial policy, such as the lack of infrastructure, the high cost of labor, and the competition from foreign multinational corporations.

The book argues that the effectiveness of industrial policy in Turkey is conditioned by the uncertainty-amplifying interventions of the state due to its weak capacity. The state's interventions in the market, such as subsidies and tariffs, can create uncertainty for businesses and investors, leading to a reluctance to invest in the country. Additionally, the state's limited capacity to implement and enforce policies effectively further hinders the effectiveness of industrial policy.

To address these challenges, the book suggests several policy recommendations. These include improving the infrastructure, promoting investment in research and development, and enhancing the skills of the workforce. The book also emphasizes the importance of promoting competition and market-oriented reforms to ensure that the benefits of industrial policy are distributed fairly.

In conclusion, this book provides a comprehensive analysis of the evolution of industrial policy in Turkey and its implications for other emerging markets. It highlights the importance of understanding the historical and institutional context in which industrial policy is developed and implemented. The book also emphasizes the need for policymakers to address the challenges faced by emerging markets and to adopt policies that promote economic development while also addressing social and environmental concerns.

Dimension: 234 x 156 (mm)
ISBN-13: 9781399510141