Trading Places: How Turkey Can Join the Rich, Using Trade Policy

Bilge Gursoy, Kaan Diyarbakırlıoğlu
2.295 380

Abstract


The aim of Turkey’s 2023 Vision Project, which coincides with the hundredth anniversary of the founding of the Republic of Turkey, is to bring the Turkish economy into the ranks of high-income countries. To reach this goal, strategies have been drawn up with a focus on the mid- and long-term future of the economy. However, the current state of affairs indicates that the Turkish economy has fallen into the middle income trap, and the key to breaking free of that is reconfiguring a model of growth that focuses on production. In light of that situation, the aim of the study is to provide a discussion of the trade policies and strategies that could be used to realize an effective model of economic growth.

 


Keywords


Middle Income Trap, Economic Growth, Foreign Trade Policies, Turkey

Full Text:

PDF


DOI: http://dx.doi.org/10.21599/atjir.14121

References


Jesus Felipe, Arnelyn Abdon, and Utsav Kumar. 2012. «Tracking The Middle-Income Trap: What is it, Who is in it, and Why?» Levy Economics Institute of Bard College Working Paper, 715; Erinç Yeldan, Kamil Taşçı, Ebru Voyvoda and Mehmet E. Özsan. 2012. Orta Gelir Tuzağından Çıkış: Hangi Türkiye? TURKONFED; Fernando Gabriel Im and David Rosenblatt. 2013. «Middle Income Traps: A Conceptual and Empirical Survey.» The World Bank Policy Research Policy Paper ; Gökhan Yılmaz. 2014. « Turkish Middle Income Trap and Less Skilled Human Capital.» Central Bank of the Republic of Turkey Working Paper.

The Tenth Development Plan (2014-2018). Republic of Ministry of Development.

Hendrik Van den Berg and Joshua J. Lewer. 2006. International Trade and Economic Growth. Armonk, N.Y.: M.E. Sharpe.

Richard Grabowski, Sharmistha Self, and Michael P. Shields. 2007. Economic Development: A Regional, Institutional and Historical Approach. Armonk, N.Y.: M.E. Sharpe.

Peng Sun and Almas Heshmati. 2010. "International Trade and Its Effects On Economic Growth in China." IZA Discussion Paper.

Jeffrey D. Sachs and Andrew Warner. 1995. "Economic Reform and Process of Global Integration." Brookings Papers on Economic Activity 26 (1): 1-118.

Jeffrey A. Frankel, David Romer, and Teresa Cyrus. 1996. "“Trade and Growth in East Asian Countries: Cause and Effect?" NBER Working Paper 5732.

Jeffrey A. Frankel and David Romer. 1999. "Does Trade Cause Growth?" The American Economic Review 89 (3): 379-399.

David Dollar and Aart Kraay. 2001. "http://www.sfu.ca/~akaraiva/e455/dollar-kraay.pdf ." http://www.sfu.ca/. Accessed November 11, 2014.

Romain Wacziarg and Karen H. Welch. 2008. "Trade Liberalization and Growth: New Evidence." The World Bank Economic Review 22 (2): 187–231.

Tatiana Didier and Magali Pinat. 2013. " https://www.gtap.agecon.purdue.edu/resources/download/6158.pdf ." https://www.gtap.agecon.purdue.edu. Accessed November 15, 2014.

Francisco Rodriguez and Dani Rodrik. 1999. "Trade Policy and Economic Growth: A Skeptic’s Guide to Cross-National Evidence." NBER Working Paper.

David Dollar. 1992. "Outward-Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-85." Economic Development and Cultural Change 523-544.

Jeffrey D. Sachs and Andrew Warner. 1995. "Economic Reform and Process of Global Integration." Brookings Papers on Economic Activity 26 (1): 1-118.

Sebastian Edwards. 1998. "Openness, Productivity and Growth: What Do We Really Know?" Economic Journal 108: 383-398.

Subrata Ghatak, Chris Milner, and Utku Utkulu. 1995. "Trade Liberalisation and Endogenous Growth: Some Evidence For Turkey." Economics of Planning 28 (2): 147-167; Utku Utkulu and Durmus Özdemir. 2004. "Does Trade Liberalization Cause a Long Run Economic Growth in Turkey?" Economics of Planning 37 (3): 245-266; Cihan Cengiz and Dutta Dilip. 2005. "Trade Liberalisation and Economic Growth in Turkey: An Empirical Model of Endogenous Growth Analysis." School of Economics and Political Science Working Papers, The University of Sdyney; Nathalie Hilmi and Alain Safa. 2007. "The Impact of Trade Liberalization On Growth The Case of Turkey." Chicago, IL.: MEEA Annual Meeting; Muhsin Kar, Osman Peker, and Muhittin Kaplan. 2008. "Trade Liberalization, Financial Development and Economic Growth in The Long Term: The Case of Turkey." South East European Journal of Economics and Business 3 (2): 25-38; Fatih Yücel. 2009. "Causal Relationship Between Financial Development, Trade Openness, and Economic Growth: The Case Of Turkey." Journal of Social Sciences 5 (1): 33-42.

Jean Mercenier and Erinc Yeldan. 1997. "On Turkey’s Trade Policy: Is a Customs Union with Europe Enough?" European Economic Review 41 (3-5): 871-880; Subidey Togan. 1997. "Opening Up the Turkish Economy In The Context of The Customs Union With The EU." Journal of Economic Integration 12 (2): 157–179; Felicitas Nowak-Lehmann Danzinger, Dierk Herzer, Inmaculada Martinez Zarzoso, and Sebastian Vollmer. 2007. "The Impact of a Customs Union Between Turkey and the EU on Turkey's Exports to the EU." Journal of Common Market Studies 45 (3): 719-743; Bilin Neyaptı, Fatma Taşkın, and Murat Üngör. 2007. "Has European Customs Union Agreement Really Affected Turkey's Trade?" Applied Economics 39 (6): 2121- 2132; Antonis Adam and Thomas Moutos. 2008. "The Trade Effects of the EU-Turkey Custom Union." World Economy, 31 (5): 685-700.

Data organized by author from IMF World Economic Outlook Database, 2015. "http://www.imf.org/external/pubs/ft/weo/2015/02/weodata/index.aspx." http://www.imf.org/.

See Appendix I, Table 1.

The Millennium Development Goals Report 2014. UNDP.

"https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-few-political-capture-economic-inequality-200114-en_3.pdf." https://www.oxfam.org/. Accessed July 15, 2014.

Paul Krugman. 2009. "http://krugman.blogs.nytimes.com/2009/03/20/the-great-recession-versus-the-great-depression/?_r=0." http://krugman.blogs.nytimes.com/. March 20. Accessed November 12, 2014; Migule Almunia, Agustin S. Bénétrix, Barry Eichengreen, Kevin H. O'Rourke, and Gisela Rua. 2009. "From Great Depression To Great Credit Crisis: Similarities, Differences and Lessons." NBER Working Papers No: 15524; David C. Wheelock. 2010. "Lessons Learned? Comparing The Federal Reserve’s Responses to The Crises of 1929-1933 and 2007-2009." Federal Reserve Bank of St. Louis Review 92 (2): 89-107.

Tony Lawson. 2009. "The Current Economic Crisis: Its Nature and the Course of Academic Economics." Cambridge Journal of Economics 33: 759-777; Robert Hoffman. 2012. "http://www.cadmusjournal.org/files/pdfreprints/vol1issue5/Reprint_CJ-I5_Need_for_New_Economic_Foundations_RH.pdf." ww.cadmusjournal.org. October. Accessed September 21, 2014; 2013. http://www.theguardian.com/business/2013/oct/24/students-post-crash-economics. October 24. Accessed November 20, 2014; Paul Krugman, 2014. "http://krugman.blogs.nytimes.com/2014/04/25/frustrations-of-the-heterodox/." http://krugman.blogs.nytimes.com/. April 25. Accessed November 11, 2014.

Sarah O. Ladislaw, Maren Leed, and Molly A. Walton. 2014. New Energy, New Jeopolitics, Background Report 2: Geopolitical and National Impacts. Center for Strategic and International Studies (CSIS).

Policy Issues in International Trade and Commodities Study Series, UNCTAD. 2013. "Global Supply Chains: Trade and Economic Policies for Developing Countries."

Tamim Bayoumi. 2011. "Changing Patterns of Global Trade." IMF Policy Paper No: 061511.

Jagdish Bhagwati, Pravin Krishna, and Arvind Panagariya. 2014. "http://docplayer.net/12227320-Jagdish-bhagwati-columbia-university-arvind-panagariya-columbia-university-may-3-2014.html." http://docplayer.net/. May 3. Accessed December 12, 2014.

World Trade Report: The WTO and Preferential Trade Agreements: From Co-existence to Coherence 2011. World Trade Organization.

http://ptadb.wto.org/?lang=1.

Jim O’Neill and Alessio Terzi. 2014. "Changing Trade Patterns, Unchanging European and Global Governance." Bruegel Working Papers.

Global Trends 2030: Alternative Worlds. National Intelligence Council of USA (NIC).

"http://esa.un.org/unpd/wpp/publications/Files/WPP2012_HIGHLIGHTS.pdf." http://esa.un.org/.

Asa Johansson and Eduardo Olaberria. 2014. "Global Trade and Specialisation Patterns Over the Next 50 Years." OECD Economic Policy Paper, July.

http://esa.un.org/unpd/wup/highlights/wup2014-highlights.pdf.

The Global Economy in 2030: Trends and Strategies for Europe. Centre for European Policy Studies (CEPS).

"http://www.worldbank.org/content/dam/Worldbank/GEP/GEParchives/GEP2007/381400GEP2007.pdf." http://www.worldbank.org/. Accessed June 20, 2014.

Sarah O. Ladislaw, Maren Leed, and Molly A. Walton. 2014. New Energy, New Geopolitics, Background Report 1: Energy Impacts. Center for Strategic and International Studies (CSIS).

2015 Global Forecast: Crisis and Opportunity. Washington D.C.: Center for Strategic and International Studies (CSIS) .

Tatiana Didier and Magali Pinat. 2013. " https://www.gtap.agecon.purdue.edu/resources/download/6158.pdf ." https://www.gtap.agecon.purdue.edu. Accessed November 15, 2014.

Global Development Horizons 2011, Multipolarity: The New Global Economy. World Bank .

http://www.imf.org/external/pubs/ft/weo/2014/02/. October.

The Global Economy in 2030: Trends and Strategies for Europe. Centre for European Policy Studies (CEPS).

Sarah O. Ladislaw, Maren Leed, and Molly A. Walton. 2014. New Energy, New Jeopolitics, Background Report 3: Scenarios, Strategies, and Pathways. Center for Strategic and International Studies (CSIS).

See also Daniel S. Hamilton and Joseph P. Quinlan. 2014. "The Transatlantic Economy 2014: Annual Survey of Jobs, Trade and Investment Between the United States And Europe." Center for Transatlantic Relations Johns Hopkins University Paul H. Nitze School of Advanced International Studies.

Kemal Kirisci and Sinan Ekim. 2015. " Turkey’s Trade in Search of an External Anchor: The Neighbourhood, The Customs Union or TTIP?" Brookings Institution in Washington and Istanbul Policy Center Working Paper .

Bülent Alirıza, Jon B. Alterman, and Andrew C. Kuchins. March 2013. “The Turkey, Russia, Iran Nexus Driving Forces and Strategies”. Center for Strategic and International Studies (CSIS).

Graham E. Fuller. 2014. Turkey and the Arab Spring: Leadership in the Middle East. Bozorg Press.

Laura B. Adam. 2012. "Turkey’s Foreign Policy In The AKP Era: Has There Been A Shift In The Axis?" Turkish Policy Quarterly 11 (3): 139-148.

Trade and Development Report. UNCTAD.

Subidey Togan. 2012. The EU-Turkey Customs Union: A Model for Future Euro-Med Integration. MEDPRO Report.

http://lpi.worldbank.org/.

See Appendix II, Table 3.

Trade Openness Ratio calculated as (Export+Imports/GDP). See Appendix I, Table 3.

See Appendix I, Table 2.

See Appendix II, Table 4.

See Appendix II, Table 5.

See Appendix II, Table 6.

Acemoğlu, Daron, and James A. Robinson. 2014. Ulusların Düşüşü: Güç, Zenginlik ve Yoksulluğun Kökenleri, (Çev. Faruk Rasim Velioğlu). Istanbul: Doğan Kitabevi.