The role of the state in the Turkish economy

Abstract

The role of the state in economic performance is critical for almost every country. This chapter reviews and assesses the effectiveness of the state in the Turkish economy over the last 15 years. A well-functioning state is key for Turkey to be prosperous and have a larger say in the global economy and for its citizens to have higher living standards. Turkey needs new investments and reforms to escape the middle-income trap. To make this happen, the state should undertake a number of important tasks, from industrial policies to institutional reforms. This chapter argues that making the institutional infrastructure more inclusive, implementing smart industrial policies, and improving the welfare state mechanism are the vital issues the state should focus on to take the Turkish economy to higher steps of the development ladder.