Economic Growth and Development in Turkey

Bu kısa makale, Türkiye’nin 21. yüzyılda nasıl bir yerli üretim deneyimi yaşayabileceği sorusuna, teknolojik ilerleme ve beşerî sermaye üzerinden yaklaşarak, bazı araştırma bulgularını özetlemekte ve gelecek için bazı dersler çıkarmayı hedeflemektedir. Makale, öncelikle, teknolojik ilerlemenin iki ana kaynağına, yenilikçiliğimize ve taklitçiliğimize, odaklanmakta, ardından, gelecekte beşerî sermayenin neden ve nasıl yenilik ve taklit süreçlerinden daha belirleyici olabileceğini tartışmaktadır.

An interesting question in comparative economic development is why Turkey fell behind South Korea even though she had better development prospects in 1960. The existing literature offers illuminating narratives of most plausible reasons, but only a few papers have identified the microeconomic foundations of relative underperformance of the Turkish economy. This paper constructs and analyzes two-sector catching up models to find contrasts between Turkey and South Korea. Results following from data-based calibrations indicate the following: With respect to initial conditions and values of structural parameters, both economies have advantages and disadvantages. The most significant contrast, however, is the huge difference in how efficiently the two countries adopt frontier technologies. While South Korean economy operates with an efficiency level very close to its upper bound of 100%, Turkey is located at the other end of the spectrum with efficiency less than 1%. Counterfactual experiments confirm the dominant role of this efficiency parameter against initial conditions and other structural parameters. An extended analysis indicates that human capital differences can only partially explain the large difference in efficiency levels.

This paper studies a second-generation Schumpeterian model to understand the nature of technological progress and economic growth in Turkey. It identifies some structural parameters numerically and tests whether certain Schumpeterian mechanisms work. Results show that both horizontal (product) and vertical (process) innovation channels operate as determined in theory. However, the pace at which vertical (process) innovation occurs is extremely low, implying that its contribution to long-run productivity growth is severely limited. Since the paper directly estimates the structural forms originating from the general equilibrium of the model economy, results do not carry any endogeneity bias. That the technological landscape very slowly expands in its vertical dimension explains why the Turkish economy did not converge to frontier economies. Since whether a firm should engage in vertical (process) innovation crucially depends on its size in theory, the most appropriate policy under resource constraints may be to strengthen the incumbent firms and support their growth. Put differently, the formation of new enterprises in the horizontal dimension may not be a policy priority.