Turkey's experience with neoliberal policies since 1980 in retrospect and prospect

Abstract

AbstractThis paper provides a critical assessment of Turkey's economic performance under the neoliberal economic policies which have been instrumental in generating a profound transformation in its socioeconomic structure since 1980. The paper draws special attention to the government's loss of policy autonomy and the democratic deficit at the initial and implementation stages of this transformation. It then evaluates Turkey's economic performance on the basis of indicators with medium and long-term impacts, such as investment, saving, industrialization, unemployment, and income distribution. This assessment shows that the neoliberal model has failed to fulfill its promises, with the Turkish economy failing to achieve performance equal to that under the previous import-substitution strategy or in comparable countries. The paper then identifies the main problem areas confronting the economy: the current account deficit, the labor market, insufficient industrial progress and income distribution, and poverty. To solve these problems, it calls for both a radical rethinking of the neoliberal policy regime and for proactive state intervention to stimulate saving and investment as part of a new development strategy, giving primary importance to industrialization, employment creation, and more equitable income distribution.