ABSTRACT
Introduction “Governance” as a developmental term was put forward by the World Bank (1989, 1992, 1994, 1997, 2000, 2002). Pervading the literature with the support of the IMF (2002), United Nations Development Programme (UNDP 1997a, 1997b), and the OECD (2001a, 2001b, 2002), it has come to refer to the establishment and maintenance of pro-developmental institutions in the political and public spheres of the developing countries. The construction of such institutions has been regarded as the precondition for successful economic activity in the private sphere. This link between the politico-public institutions and economic development has been accentuated since the early 1990s by a so-called “good governance” agenda, according to which market-friendly institutional reforms should be implemented so as to strengthen the protection of property rights and enforcement of contracts through “democratic” means of governance. The institutional reforms leading to good governance imply the need to incorporate civil society organizations and politically independent agencies into the decisionmaking processes of the state apparatus.1 Governance has been usually examined in the Turkish literature as a procapital project of the neo-liberal ideology (e.g. Aygül 1998; Bayramoğlu 2002, 2005; Güler 2003; Güzelsarı 2003, 2004; Özdek 1999; Zabcı 2002). Governance-related perceptions of different societal strata in Turkey have also been analyzed in some detail, with special emphasis on the causes of corruption and the attitudes toward reforms in public administration (e.g. Adaman and Çarkoğlu 2000; Adaman et al. 2001, 2003, 2005). There is, however, a lack of descriptive studies that focus upon various dimensions of Turkey’s governance status in the world and performance over time. The main motivation behind this chapter is, thus, to provide a descriptive analysis of the various dimensions of Turkey’s recent governance experience. In this regard, Worldwide Governance Indicators (WGI), generated regularly by the World Bank Institute (WBI), have the potential to serve as useful inputs for constructing a “global” framework of analysis, within which Turkey can be compared to the rest of the world. There is a particular rationale behind evaluating Turkey’s governance experience by using the indicators developed by the World Bank. The concept of
“good governance,” as a term coined by the World Bank, has special importance for Turkey, which has proved to be one of the foremost countries that carried out governance reforms in the financial and economic spheres most intensively, especially after the outburst of the 2000-2001 financial crisis. These reforms basically resulted in Central Bank independence and the establishment of independent regulatory and monitoring boards in the financial and banking sectors, parsimonious control of fiscal accounts and abatement of public deficit, singledigit inflation, large-scale privatizations, various structural reforms in the public sector etc. It was Kemal Derviş – an ex-staff member of the World Bank – who initiated these reforms after being appointed as the minister of economy by the coalition premiership of Bülent Ecevit. The reforms have been maintained and diversified further by the one-party government of the Justice and Development Party (AKP), which first came to power in November 2002 and also won the general elections in July 2007 to start its second term. As such, governance reforms in Turkey can be said to have been carried out with direct obedience to the World Bank’s discourse on good governance.2 Therefore, measuring Turkey’s governance performance in terms of the WGI has the potential to yield conceptually consistent assessments. For such assessments, two years of reference should be selected for comparison purposes. Turkey’s last decade can be divided into two distinct periods with respect to the crisis that burst out in the November 2000-February 2001 period. Thus, a meaningful comparative framework can be devised between an “initial” pre-crisis year and a “terminal” post-crisis year. The year 2000 is possibly the best initial year for the purposes of this study. First of all, the “institutional preconditions” of the crisis can be expected to have reached a culmination in 2000. Second, the number of observations in the dataset of the WGI is highest in 2000 among the pre-crisis years. Therefore, the extent of the effect of Turkey’s poor governance structures on the outburst of the crisis can be captured best by employing the year 2000 as the initial reference point in time. On the other hand, 2007 seems to be the best option for the choice of the terminal year of analysis, not only because it is the latest year for which the dataset of the WGI was updated (at the time of writing), but also because it roughly represents the final year of the AKP’s first period in power. Thus, the descriptive analysis carried out in the following pages can be considered also as an evaluation of AKP’s governance performance. In the second section, the six main dimensions of governance measured by the WGI are introduced. Based mostly on statistical grounds, lots of criticisms have been directed at governance data in general and the WGI in particular. For the time being, however, there are no better quantitative alternatives to either the existing data on governance or the existing indicators derived from them. Therefore, use of the existing data and indicators with due caution is presumably a better option than outright negligence. In this regard, this chapter not only examines Turkey’s governance experience in “quantitative” terms, but also develops a decent procedure to carry out descriptive analysis using the WGI. In the third section, the methodology used to arrange the WGI for the purposes of this chapter is described. Such arrangement is required to analyze Tur-
key’s governance status across certain country groups and over time. To do so, the WGI are matched with the income-based and regional classifications of countries as presented in the World Development Indicators (WDI) of the World Bank. A comparative framework of analysis is constructed by means of this matching, so as to see if there is a considerable shift in Turkey’s governance levels vis-à-vis country groups from 2000 to 2007. The results concerning Turkey’s governance experience are discussed with respect to country groups classified according to income level in the fourth section, and with respect to country groups classified according to region as well as with respect to the European Union (EU) in the fifth section. Turkey has been striving very hard for EU membership for quite a long period of time, and there are prominent parallels between the famous Copenhagen criteria compelled by the EU and the six dimensions of good governance measured by the WBI. Thus, helpful implications can be derived by analyzing Turkey’s relative position in governance vis-à-vis the EU. The final section concludes the paper by interpreting the results. It draws attention to the priority areas, in which Turkey seems to have “binding constraints” that retard its “take-off” in institutional development. The term “binding constraints” has been employed by Rodrik et al. (2007) to argue that “comprehensive” strategies for economic development are likely to fail. Developing countries should first determine the foremost binding constraints on their economic development possibilities and put priority on these areas, rather than channeling their policy-making energies into getting rid of the constraints with no sequencing of priorities. This idea of “binding constraints” on “economic development” can be conceptually applied to governance-related “institutional development.” In this sense, one principal objective of this study is to reveal Turkey’s “binding constraints” on institutional development.
