Public participation in forestry in Turkey

Recently public participation in forestry has been seriously considered in Turkey. Participation is however quite a challenge for a country with a long tradition of top-down management and a strong bottom-up dependence on public provisioning. In such a setting, it may not be surprising that the experiences with public participation in forestry in Turkey are mixed. There are some positive initiatives like the creation of farmer's cooperatives and NGOs, but their role is quite limited and small of scale. This paper is bringing together different views based on existing studies in Turkish related to Turkey's experience with implementing public participation in forestry.     

To educate or not to educate: Impact of public policies in developing countries

It is well-known in the empirical literature that present-oriented individuals are less likely to go to college as compared to forward looking individuals. There is compelling evidence of a high percentage of dropouts from high schools in poor countries. The endogenous sorting of homogeneous workers into skilled and unskilled types might be the outcome of exposure to income risk and an individual's aversion to risk. We obtain the critical risk aversion associated with income levels above which no individual chooses education. Broad-based economic policies may have perverse impact on educational attainments of individuals. We argue that such an analysis has been largely neglected in related studies. This outcome may also be undesirable from the perspective of a social planner. To address this, we suggest a sector-specific tax-subsidy scheme as a corrective instrument of public policy.     

Patterns of innovation and intra-industry heterogeneity in Turkey

This study investigates the patterns of innovation in Turkey and its primary aim is to examine the intra-industry heterogeneity in innovative activities. For this purpose double-level factor analysis is performed and the resulting factor scores are used in the subsequent cluster analyses. Four distinct innovation patterns, which may be interpreted as ingredients of different technological regimes, are identified. A taxonomy of innovative firms is also constructed by grouping firms according to their innovation characteristics and, to the authors’ knowledge, this is the first empirical classification study in Turkey. These results indicate that industries differ in terms of innovative activities. However, industries are not dominated by a single technological regime. On the contrary, five technological regimes were observed in almost all sectors. Building upon these facts, it can be speculated that sector-specific conditions determine the extent of intra-industry heterogeneity.     

Brain drain from Turkey: an investigation of students’ return intentions

The emigration of skilled individuals from Turkey attracted greater media attention and the interest of policymakers in Turkey, particularly after the experience of recurrent economic crises that have led to an increase in unemployment among the highly educated young. This study estimates a model of return intentions using a data set compiled from an Internet survey of Turkish students residing abroad. The findings of this study indicate that, as expected, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of student nonreturn. However, the analysis also points to the importance of prior return intentions and the role of the family in the decision to return to Turkey or stay overseas. It is also found that the compulsory service requirement attached to government scholarships increases the probability of student return. Turkish student association membership also increases return intentions. Longer stay durations, on the other hand, decrease the probability of return. These findings have important policy implications.     

Costs of a missing FTA: the case of Turkey and Algeria

Turkey has been deeply integrated with the EU, its largest trading partner, particularly following the Customs Union agreement in 1996. However, the free trade agreements (FTAs) signed by the EU with third party countries may create some unfair competitive pressures, market share and welfare losses for Turkey. This study investigates the impact of the FTA signed by Algeria and the EU in 2005 on Turkey’s trade flows. Covering 181 countries, a difference-in-differences analysis embedded in an extended gravity framework is employed to quantify the trade effects of the EU-Algeria FTA for the period of 1996–2013. Our findings suggest that bilateral trade between Turkey and Algeria is affected adversely due to the FTA. The counterfactual analysis shows that Turkish exports and imports to/from Algeria could have been 12 and 17% higher, respectively, had there been no FTA between the EU and Algeria.     

Food consumption and economic development in Turkey and European Union countries

This study investigates the relationship between food consumption and economic development in Turkey and European Union countries. Differences in food diets are analysed by using data on per capita consumption in caloric terms based on the period from 1970 to 2000. The cluster analysis is employed to derive country grouping on the basis of similarities in dietary structure in the 1970 and 2000. Existence of a trend towards a common European diet is explored with Beta convergence. The empirical results show that per capita food consumption is becoming less responsive to changes in income and appears to be reaching a ceiling in the majority of EU countries and Turkey. However, the share of animal products in food consumption diet is low and income expenditure elasticity of animal products is higher with 0.84 values in Turkey than that in European countries in 2000. There are great differences in dietary structure between Turkey and the European Union. Differences also exist between European Union countries; however, despite these differences there is a general tendency for dietary structure to become increasingly similar across the majority of European Union countries. The result also supports the absence of a convergence towards a common diet if Turkey joins the European Union.     

Revisiting the finance–growth nexus: the Turkish case, 1980–2010

In Turkey, the empirical results on the link between financial development and economic growth are mixed. The existing studies do not take into account the fact that Turkey has experienced endemic political and economic instabilities over extended periods. This study aims to analyse the role of macroeconomic instability and public borrowing on the finance–growth nexus in Turkey by using time series econometric techniques over the 1980–2010 period. In doing so, we attempt to extend the existing literature by taking into account the role of macroeconomic instability as well as public borrowing. Our results reveal that there are additional – albeit indirect – channels between finance and growth via the effects of macro instability and public borrowing on financial development and economic growth. After taking into account the effects of overall instability and public borrowing, we found that growth–financial development relationship is bidirectional and permanent. In other words, in Turkish case, economic growth and financial development are jointly determined. Thus, our results shed some light on the ambiguity of the evidence on the link between financial development and economic growth for Turkey.     

An asymmetric analysis of the relationship between oil prices and output: The case of Turkey

In this paper we analyze the asymmetric impact of oil price changes on the economic activity in Turkey. In contrast to previous studies on Turkey, the existence of an asymmetric relationship between economic activity and oil prices is investigated by regime-dependent impulse response functions and forecast error variance decompositions based on a multivariate two-regime Threshold VAR (TVAR) model. Our analysis suggests that the relationship between oil prices and macroeconomic activity is nonlinear and exhibits an asymmetric pattern: oil price changes have a significant effect on inflation and output when the change exceeds a certain threshold level. The lower response of macroeconomic variables to oil price shocks in the low oil price change regime also indicates that only the shocks exceeding the optimal threshold level are able to create a contraction in the economic activity.     

Border Crossings between Georgia and Turkey: The Sarp Land Border Gate

The Sarp land border gate between Turkey and Georgia has become Turkey’s gateway to the East in recent years. With a large number of individuals crossing every day, it is also a labour gate, where irregular Georgian immigrants cross the border for work in Turkey. In general, border policies are constructed and reconstructed in a dynamic process in which economic, security, ethnopolitical, geopolitical and cultural paradigms interact. The aim of this paper is to observe the complementary and conflicting relationship and negotiation process between economic and security paradigms in particular, with a focus on the perceptions of the officers of the border administration and state bureaucracy at the local level. To this end, field research was carried out consisting of interviews with Turkish state officials responsible for immigration and border crossing in the Sarp gate region. The article sheds light on the interaction between various agencies, actors and stakeholders in border policymaking at the regional level. It also elaborates on the profiles both of incoming immigrants employed as irregular workers and of deportees. The results of the qualitative study show that the dominance of the economic paradigm that underlies the main framework of Georgia-Turkey relations overrides security concerns between the two countries, thus necessitating a more flexible implementation of laws. The field research illustrates that implementation of laws and regulations at the local level varies and while some groups of irregular immigrants are allowed to work, others are not and, what is more, are deported.     

The impact of financial factors on export decisions: The evidence from Turkey

The paper tests the validity of the financial constraint hypothesis in Turkey. In this context, we apply a panel logit model by using the dataset of firms whose stocks are traded in Istanbul Stock Exchange (ISE) for the period 2000–2011. As a result of analysis, we find that the financial constraint hypothesis is not valid in Turkey. The findings are crucial for firms in Turkey since the hypothesis has not been tested before for Turkey.     

The role of unemployment in wage determination: further evidence on the wage curve from Turkey

This paper presents an empirical estimation of the correlation between wages and regional unemployment rates in Turkey, more specifically it explores the role of regional unemployment rates in wage determination. The analysis builds upon a series of recent empirical studies on the wage-unemployment relationship, now commonly known as ‘the wage curve’, a downward sloping curve in wage-unemployment space. The existing studies are for most part in advanced market economies, while this paper presents one of the few attempts at a wage curve analysis within the context of a developing market economy. A cross-sectional estimation of micro level individual wage data for the Turkish labour market in 1994, suggest a statistically significant negative correlation between wages and regional unemployment rates. Separate regressions for men and women, however, show a wage curve to exist only in the male labour market. The study also presents the results on other variables of wage determination such as returns to schooling, returns to age, job tenure, gender, industrial and occupational affiliation of the worker, economic sector and union status.     

Unemployment and labour force participation in Turkey

This article investigates the relationship between labour force participation rate and unemployment rate in Turkey a developing country. Cointegration analysis is carried out for the aggregate and gender-specific series. The findings indicate that there is no long-run relationship between labour force participation and unemployment rates in Turkey. Thus, unlike in the case of the developed countries, the unemployment invariance hypothesis is supported in Turkey.     

Pious populists at the gate

In this paper, I evaluate the economic track record of the Justice and Development Party (AKP) in Turkey, using the synthetic control method (SCM). This methodology compares the post-AKP development trajectory of Turkey with that of a weighted combination of similar but untreated countries. The SCM is particularly useful in this setting as it allows construction of a synthetic control to Turkey that replicates the pre-AKP development dynamics. I find that Turkey under AKP grew no faster in terms of GDP per capita when compared with a synthetic counterpart from a wide pool of other countries. Restricting the pool of control units to only include Muslim countries shows Turkey growing slower than its Muslim counterparts. Moreover, analysis of post-crisis recovery periods shows Turkey growing no faster than comparable post-crisis cases across time. However, expanding the outcome set to health and education reveals large positive differences in both infant and maternal mortality as well as university enrolment, consistent with stated AKP policies to improve access to health and education sectors for the relatively poorer segments of the population. Nonetheless, increased access in these fields is not matched by improved labour market access, as both labour force participation as well as unemployment have deteriorated, and especially so for women. As for measures of institutions, I fail to find any durable positive differences in measures related to democracy or human rights early on during the post-intervention period, and in several instances there is evidence of significant declines over the long run. A particularly salient feature of the AKP's reign is reduced political power of the military, consistent with the military in Turkey receiving lower economic rents than its synthetic counterpart during AKP's reign.     

Comparative performances of EU-15 and Turkey: a PIN analysis

Turkey started the accession process with European Union (EU) in 2005. One of the main topics of EU Turkey negotiations was the economic convergence of Turkey to EU norms. This study devises and uses Panel Index Numbers (PIN) analysis to evaluate the performance and convergence prospects of Turkish economy in the face of EU-15 economies. As evaluation areas, we have selected two main macroeconomic indicators as GDP and Export. Our results have shown that, for both indicators, Turkish economy outperforms rest of the EU-15 economies, a point that should be valuable in the process of accession.     

Comparison of indicators of women’s labour between Turkey and EU member states by employing multidimensional scaling analysis and clustering analysis

At present, because of social, cultural and economic changes, women support the economies of their countries by their status as workers. In this research, we aim at comparing the status of Turkey in terms of indicators of women in the labour force with that of EU countries, thereby revealing the similarities and differences. The variables indicating women in the labour forces of the 28 EU countries and Turkey were analysed utilizing multidimensional scaling analysis (MDSA) and clustering analysis (CA).

According to the MDSA, the countries form three different groups in two-dimensional space. The clusters formed by the CA are congruent with the groups formed according to the MDSA. When compared with EU members, Turkey has very low values, particularly in terms of the ratio of working women, the ratio of jobless females who are primary or secondary school graduates and the ratio of women who are senior high school graduates.     

The effects of government spending shocks on the real exchange rate and trade balance in Turkey

The aim of this study is to investigate the effects of government spending shocks on the real exchange rate and foreign trade balance in Turkey for the period of 2002:01–2012:04 within a structural VAR framework. The analysis shows that a positive shock to the government spending tends to induce real exchange rate appreciation and deterioration in trade balance. We also find that the composition of the government spending matters. Although shocks to the government nonwage consumption generate an appreciation in the real exchange rate and worsening of the trade balance, the effects of government investment shocks remain insignificant. Furthermore, the analysis demonstrates that shocks to government spending are associated with a rise in taxes, which is indicative of a spending-driven tax adjustment process in Turkey.     

Persistence of firm-level profitability in Turkey

The dynamics of company profits for 172 of the largest manufacturing firms in Turkey are studied. A time-series analysis is used to estimate the long-run projected profits and firm-specific speed of adjustment parameters that measures the rate at which short-run rents are eroded. While persistent profitability differences across firms are observed, there is also a moderately quick erosion of rents except for the most highly profitable firms. Firm characteristics rather than industry effects account for the differences in permanent profits. Contrary to the widespread view that developing countries suffer from uncompetitive markets, the results in this paper suggest that the intensity of competition in Turkey is no less than in developed countries and similar to other developing countries.     

Self-selection and Pareto efficient taxation

This paper analyses the set of Pareto efficient tax structures. The formulation of the problem as one of self-selection not only shows more clearly the similarity between this problem and a number of other problems (such as the optimal pricing of a monopolist) which have recently been the subject of extensive research, but also allows the derivation of a number of new results. We establish (i) under fairly weak conditions, randomization of tax structures is desirable; (ii) if different individuals are not perfect substitutes for one another in production, then the general equilibrium effects—until now largely ignored in the literature—of changes in the tax structure may be dominant in determining the optimal tax structure; in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor, the optimal tax structure entails a negative marginal tax rate on the high ability individuals, and a positive marginal tax rate on the low ability individuals (the marnitude of which depends on the elasticity of substitution); (iii) if individuals differ in their preferences, Pareto efficient taxation may entail negative marginal tax rates for high incomes; while (iv) if wage income is stochastic, the marginal tax rate at the upper end may be 100%.Our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic.     

Do birth order and family size matter for intergenerational income mobility? Evidence from Sweden

Previous studies of intergenerational income mobility have not considered potential birth-order or family-size effects in the estimated income elasticity. This article uses a large sample of individuals born between 1962 and 1964; income elasticities with respect to parents’ incomes are estimated for individuals with different birth-order positions and family sizes. Results based on labour income and total income for sons and daughters are reported separately. The elasticity tends to decrease with family size as well as with birth order for a given family size, especially in the labour-income analysis of fathers and sons.     

From pro-natalist rhetoric to population policies in Turkey? An OLG general equilibrium analysis

We build an overlapping generation (OLG) general equilibrium model of Turkey with survival rates and endogenous labour supply to simulate the economic, fiscal, welfare, and intergenerational redistribution impacts of the medium and high fertility demographic scenarios projected by the United Nations. We assume that the high fertility variant is a realistic demographic proxy for pro-natalist policies in Turkey. Our results show that on a purely economic basis, a higher fertility scenario in Turkey appears open to criticisms as it cannot offset the social security pressures of ageing, and it also involves intergenerational welfare redistributions so that current young adults are unlikely to endorse natalist rhetoric and policies.