Planning with a large public sector: Turkey (1963–1967)

Abstract

As promotion of economic growth becomes a declared aim of policy-makers in less developed countries (LDC), more and more emphasis is placed on the public sector as an essential instrument of policy implementation. The public sector is considered more capable of inducing higher rates of savings and of channeling them into development-promoting outlets than the economy can do by itself. State Economic Enterprises (SEE) financed wholly or in large part through government budgets become the instruments of such policies. In an environment where the private sector invests mainly along traditional lines and is shy of long gestation periods, the absorption of modern technology depends on an ability to amass and channel large amounts of finance capital into productive ventures with relatively little direct short-run profitability. The absence of organized markets for equity capital so prevalent in LDC also points in the direction of the state's active participation in economic activities.