Davutoglu, Mustafa (1997) The privatisation of state economic enterprises : an economic and political analysis of the Turkish case. PhD thesis, University of Warwick.

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Abstract

This study is an economic and political analysis of the privatisation of state economic enterprises (SEEs) in Turkey between 1986-1996. A radical shift from planned to a market economy is observed in Turkish economic policy which occurred during the 1980s as a response to the crisis of the late 1970s.

Privatisation has been one of the major elements of this new economic policy. The initial impetus towards privatisation sprang from dissatisfaction with the performance of SEEs. Attempts have been made to change the nature and the role of the public sector in the Turkish economy. It was hoped that privatisation would improve the economic performance of the SEEs by freeing them from direct state intervention and exposing them to the market forces.

Within the above perspective, this thesis provides a case study of the Turkish experience with privatisation by examining the concept based on an analytical framework. After a decade of privatisation efforts, the results of the Turkish privatisation look disappointing. The study identifies political, economic and social factors as the major influences that determined the outcome of privatisation in the Turkish context. This work suggests that the implementation of successful privatisation policies hinges on the ability and capacity of the political leadership to control the bargaining process. It appears to be essential for governments to form a strong coalition which embraces support from the public and various interest groups to promote and implement the privatisation programme smoothly. The Turkish case shows that the government’s failure to control the process combined with other factors such as an unfavourable macroeconomic environment and an inefficient institutional framework all contributed to the unsuccessful outcome of its privatisation policy.

In the empirical part of the research, the efficiency of the privatised firms in terms of their profitability and productivity are evaluated. The findings from the case studies show that there are significant improvements in the performance of the privatised enterprises in Turkey following privatisation. Though some poor financial performance is observed in the eight privatised enterprises studied, in general all of them have recorded significant improvements in labour productivity. There is also evidence that attempts to reduce the role of the public sector as the supplier of goods and services in Turkish cement, airline catering and telecom equipment manufacturing sectors have been largely successful. Hence, it is now widely acknowledged that the private sector can perform in these areas more efficiently and at a lower cost and offer better quality goods and services than the public sector.

The study has two major conclusions. The first is that privatisation is an economic and political issue. As the Turkish case illustrates, politics plays the most important role in deciding whether or not to privatise and the outcome of privatisation policies. However, the economic justification of privatisation, which rests upon the potential improvements in efficiency, which come from greater competition, appear to be the main objective of most privatisation programmes.

The second conclusion is that privatisation is not a panacea for all the economic problems that governments face, but as the successful privatisation examples show it is a way forward to promote economic efficiency at the both enterprise and macroeconomic levels. Most important of all, a radical privatisation programme can significantly reduce the state intervention in the management of the economy and eliminate the issues of political patronage, rent-seeking and favouritism especially in developing countries.

Item Type:	Thesis (PhD)
Subjects:	H Social Sciences > HC Economic History and Conditions J Political Science > JQ Political institutions (Asia, Africa, Australia, Pacific Area, etc.)
Library of Congress Subject Headings (LCSH):	Government business enterprises -- Turkey, Privatization -- Turkey, Turkey -- Economic conditions -- 20th century, Turkey -- Economic policy, Public administration -- Turkey, Turkey -- Politics and government -- 20th century
Official Date:	April 1997
Dates:	Date Event April 1997 Submitted
Institution:	University of Warwick
Theses Department:	Department of Politics and International Studies
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Grant, Wyn
Format of File:	pdf
Extent:	vi, 384 leaves : illustrations, charts
Language:	eng

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