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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.

This 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.

This 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.

AbstractThe main objective of this essay is to point out the missing links between neoliberalism on the one hand, and a comprehensive analysis of poverty and effective policies to tackle it, on the other. After identifying the main channels through which neoliberalism affects poverty, I will draw attention to the inadequacy of the neoliberal approach in coming to terms with the main reasons behind poverty, as well as in developing a comprehensive and effective mechanism for its alleviation. I emphasize the role of international institutions in determining the dominant development discourse and changes in the importance given to the issue of poverty over time. The essay links the ineffectiveness of existing poverty alleviation policies to distributional imbalances at both the global and domestic levels. Against the background of the main constraints and opportunities for effective poverty alleviation policies in individual countries, it emphasizes the need for a poverty alleviation strategy as an integral part of a broader development strategy and identifies its main premises. It calls for action on the academic, domestic and international fronts and stresses the central role of the state, a more balanced reliance on domestic and international markets, emphasis on productive employment creation, the development of effective redistribution mechanisms, and the creation of effective domestic and international constituencies as the main components of such a strategy.

Much of the recent debate on the labor market issues of developing countries has revolved around the interaction of the labor market with stabilization and structural adjustment policies, introduced mostly in conjunction with the IMF and the World Bank. In particular, there is a growing body of literature on the interaction between structural adjustment policies and employment performance in these countries.According to the dominant view in this literature, the favorable employment effects of these policies stem basically from the shift of industrial trade strategy from state-led import substitution towards market-based export orientation.

One of the main objectives of the Stabilization and Structural Adjustment Program (SSAP) introduced in Turkey in January 1980 was to transform the industrial trade strategy from archetypal import-substitution to export-orientation and to attain a higher level of integration with the international economy through market-based policies. International financial institutions like the IMF and, in particular, the World Bank have been closely involved in this process. Apart from a number of stand-by agreements with the IMF, Turkey received five successive structural adjustment loans from the World Bank during 1980-84 with their conditionality extending into a wide range of spheres like import liberalization, export promotion, and financial liberalization. Not only was Turkey one of the first to conclude such agreements with the World Bank, it was also identified as one of the countries complying with their provisions with "low slippage".3 Even when there were no formal agreements, successive governments since 1980 have had very close and amicable relations with both of these Bretton Woods institutions.