Backroom economic decisionmaking and withering of politics: The case of Turkeys lowgrade democracy

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Backroom economic decision-making and withering
of politics? The case of Turkeys low-grade
democracy

• Mine Eder, Bogazici University
• Oct 24-26 2008
• Yale-WB political economy workshop
• Washington DC

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OUTLINE

• An overview of lingering structural problems in
  Turkeys political economy
• Persistent problems of governance Turkey,
  problems with accountability, rule of law,
  transparency and corruption
• Why does economic liberalization per se fail to
  solve the problem of governance?
• The case of neoliberal populism in Turkey
  liberalization with lingering patronage politics
• AKP reproducing most of the populist legacies in
  Turkish politics
• Why should we be concerned about populism and its
  variants?
• Links between neoliberal populism and quality
  of democracy

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Methods

• Overview of macroeconomic performance of Turkey
  since the start of the countrys economic
  liberalization with particular focus on
  post-financial crisis (2000/2001) period
• Focusing on major economic decisions of AKP
  government
• a) privatization decisions
• b) public procurement processes
• c) relations with the IMF
• d) agricultural reforms
• e) social security reforms
• Assessing these decisions in terms of prior
  deliberation, public debate
• Screening major newspapers in Turkey and
  compiling evidence on
• a) cases of failed accountability, lack of
  transparency (public procurement cases),
  circumvention of intermediary institutions,
  associations
• b) corruption scandals, examples of
  clientelistic networks
• c) political and social tensions, instability,
  legal/constitutional disputes
• d) attempts to control and intolerance towards
  critical media
• e) public speeches, rhetoric of anti-elitism

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AKPS POST-CRISIS (2000/2001) ECONOMIC
PERFORMANCE GLASS HALF EMPTY?

• Prons economic growth, lower inflation, booming
  small-to medium enterprises, booming exports,
  ability to attract FDI and foreign capital
  inflows
• Cons borrowed growth, increasingly
  unsustainable debt accumulation, (rising current
  account and trade deficits), failure to address
  fundamental problems in Turkeys political
  economy
• Unemployment, particularly youth unemployment
• Very low female participation in the labor force
• Increasing social insecurity, persistently strong
  informal economy but weakening of informal
  welfare networks (with commodification of
  agricultural labor, end of informal housing, and
  family)
• Growing rural unemployment and poverty
• Persistence of inequality and income distribution
• Limited access to higher education and poor
  education standards
• 84th in Human Development Index
• 2nd worst income distribution in the world (after
  Mexico)

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Key macroeconomic indicators
Source TR Central bank www.tcmb.gov.tr and Under
secretariat of Treasury www.treasury.gov.tr
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Central government consolidated budget debt stock
(billion )
Source Undersecretariat of Treasury.
www.treasury.gov.tr
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Comparative indicators on Turkeys external debt
(2005) ( )
Calculated from www. treasury.gov.tr
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Composition of Foreign Debt (Millions )
Source Erinç Yeldan ( 2007) Patterns of
adjustment under the age of finance.
http//www.networkideas.org/feathm/jul2007/PPT/Eri
nc_Yeldan.ppt289,1,Patterns of Adjustment under
the Age of Finance The Case of Turkey as a
Peripheral agent of New-Imperialism
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Turkey Labor Productivity and Real Wages,
2000-2006
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Source www.treasury.gov.tr
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Labor Force Status By Non-Institutional Civilian
Population, Years and Sex (Thousand Person, 15
Age)
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Employment by Status of Workplace, (Female,
Thousand Person, 15 Age)
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Economic Activity By Years And Sex ( Female
Population, Thousand Person, 15 Age)
Source TUIK
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Employment Status Of Persons Who Are Not
Registered To Any Social Security Institution Due
To Main Job By Years and Sex (Thousand Person,
15 Age)
Source TUIK
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The poverty rates of individuals according to
poverty line methods, TURKEY
Source TUIK
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Poverty rates according to economic activity of
the household members, TURKEY
Source TUIK 1. calculated as shares of specified
groups in the total population
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Income distribution by quintiles ordered by
income (Turkey)
Source TUIK
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(No Transcript)
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Human development report 2007/2008
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Turkeys lingering governance problems

• Persistent problems of clientelism, privatization
  as a new platform of patronage politics (rise of
  new Islamist capitalists?)
• Excessive centralization of economic
  decision-making, absence of any serious
  deliberation/consultation or public debate (e.g.
  Social security reform, wage bargaining,
  relations with NGOs and business associations)
• Lack of transparency, continuing politicization
  and encadrément
• Insufficient separation of powers and
  accountability
• Absence of independent media, growing intolerance
  of criticism from media
• Persistent social/political tensions and
  polarization between the Islamists and the
  secularists
• Heightened Kurdish conflict
• Cemaat organizations, philanthropic
  organizations and similar informal groups
  slowly replacing social functions of the state

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How can we explain political success of AKP with
lingering political economy and governance
problems in Turkey?

• Disappearance of political economy issues from
  the public debate, The IMF-consensus
• Electoral success does not translate into good
  governance
• Convenience of usual patronage politics rather
  than politics of deliberation
• Failure of secular opposition who has also long
  failed to address these two dimensions in Turkey
• Economic voting? continuing obsession with
  identity politics
• Post-9/11 factors Turkey as the model of
  Moderate Islam
• IMF and EU as insufficient external anchors of
  stability
• Limits of Islamist mobilization?
• Neoliberal populism? significant increase in
  social transfers and philanthropic state with no
  structural reform on issues such as agriculture
  and poverty

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What is neoliberal populism?

• Carrying out basic economic liberalization
  agenda, financial liberalization, trade
  liberalization, coupled with fiscal discipline,
  (which rules out major redistributive policies
  conventionally associated with populism)
• But maintaining the core strategies of populism,
  charismatic leadership, direct appeal to the
  people, (anti-elitism), circumventing
  institutions, parliamentary and other organized,
  institutionalized channels of communications,
  continued use of patronage and clientelistic
  networks

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Towards a breed of neoliberal populism?

• Persistent core of populism
• A language of the people
• Distaste for institutions
• Centralization of decision-making
• Relatively new elements in the neoliberal era
• - Micro-populism instead of macro-populism
• - Philanthropy rather than a social state
  (grateful masses versus rights-based citizenship)
• - Technocratization and withering of politics

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Relationship between democracy and populism
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Turkey specific conclusions

• AKP paradoxically consolidating democracy in
  minimalist terms through neoliberal opening into
  the world economy, responding international
  pressures for democratization, (the US but
  particularly the EU), taking an anti-militarist
  stance, reduced risk of a military-coup
• But clearly lowering the quality of democracy
  in terms of accessibility, accountability,
  responsiveness of government
• AKP appears to be permanently stuck in between
  redemptive and pragmatic aspects of democracy
• Problematic reduction of democracy debate into
  shades of secularism
• Complete withering away of political economy
  issues from public debate

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Broader questions and conclusions

• Why are institutional and regulatory reforms and
  even legal reforms often not enough to ensure
  good governance?
• Neoliberal populism running the risk of
  disintegrating into the underside or dark
  side of democracy
• The need to understand that blind-folded economic
  liberalization may help expand patronage rather
  than curb it.
• The need to differentiate between politics as
  deliberation and politics as patronage.
• How obsession with identity politics (Islam,
  Kurdish politics in the case of Turkey) help
  de-politicize economic issues
• Questions on the (f)utility of external anchors
  for democratization and good governance