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May 22, 2012
 
 
 
 
 
 
Business 31 May 2007, Thursday 0 0 0 0
İBRAHİM ÖZTÜRK
i.ozturk@todayszaman.com

Turkey: New stability or old inertia?

Turkey has recently been undergoing deep economic and political as well as social transformations. The changes, though, seem unintentional and poorly thought out; they are reactions, not decisions.
Triggering many of the changes were successive economic crises since 1994 and Turkey’s intention to become a full member of the EU. Therefore, the Copenhagen criteria with respect to politics and the Maastricht criteria for the economy have become a domestic part of our transformation agenda.

As time passes, particularly due to presidential and general elections, serious resistance to this ongoing process has been witnessed. In this “support-resistance paradigm,” we return to the discussion of the importance of stability and the danger of inertia.

The term “stability” is one of the precious and most-appreciated concepts in society. Independent of the type of the dominant regime, authoritarian, democratic or otherwise, stability is interpreted as having vital importance to economic development. However, what we mean by the term stability is not clear enough. Without clarifying this term, it could easily be used to describe an underachieving, unfair authoritarian system. On the positive side, it could also be used to imply that the existing path is a promising one and that preservation of the situation would bring even further benefit to the whole of society.

What I want to underline here is that sometimes the concept of stability is confused by a quite dangerous concept of inertia, which might prevent change and block merit-based competition to creating a free, fair open, and an inclusive system. Therefore our emphasis must be simultaneously on stability as well as on equity and efficiency.

Otherwise, stability would be converted into a situation where the logic of economic transaction would lose its meaning. At this point, Mancur Olson’s work on the rise and decline of nations could shed some light on the issue at hand. For Olson, stable societies tend to have more organizations for collective action. Creating new cooperation has its costs. When an organization is formed, it tends to persist, even when its original purpose has changed. Moreover, the formation of an interest association takes time. Thus, political stability produces more particularistic interest associations. Special interest organizations and coalitions (distributional coalitions) reduce efficiency and make political life more divisive.

Distributional coalitions struggle to maximize their own self-interest rather than finding ways of increasing this income overall. Thus, special interest groups attempting to get a bigger slice of the pie will lead to decreased societal production.

On the other hand, encompassing organizations have some incentive to increase societal production. They will internalize much of the cost of inefficient policies and accordingly have an incentive to redistribute income to themselves with the least possible social cost, and to give some weight to economic growth and to the interests of society.

The underlying logic of collective action and its implications provide a general explanation for the economic growth and decline of states. The longer the period of stable government, the more special interest groups will form to rob the economy. On the other hand, countries whose distributional coalitions have been abolished by totalitarian government or foreign occupation will grow relatively quickly.

The clearest message that one could draw from this Olsonian analysis on the formation and persistence of exclusive distributional coalitions is: (i) small but well-organized groups can have permanent impacts on the rest of society; (ii) interest-seeking organizations, as explained here, tend to be counterproductive and exclusive; (iii) the presence of these coalitions would prevent change even if they are not at all efficient; (iv) stability could be converted into this kind of organization, where the dynamism of change, competition, accountability and transparency is curtailed.

One should continue observing Turkey in the light of this empirical evidence. Who is going to enjoy the final victory? Those seeking authoritarian stability, that is, the institutional inertia of the state, or those seeking the continuation of the recent pace of transformation and openness? 

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