Export expansion, capital accumulation and distribution in Turkish manufacturing, 1980–9

Abstract

In the early 1980s, Turkey started to pursue an export-oriented growth strategy centred on manufactured exports. Stimulated mainly by a vigorous export promotion strategy which consisted of high export subsidies, competitive devaluations of the Turkish lira, and repression of domestic demand, Turkey increased the total value of its merchandise exports fourfold by the first half of the 1980s. While the economic and political effects of this episode are in general well-documented, (for example, Celasun and Rodrik, 1989; Senses and Yamada, 1990; Onis and Riedel, 1993), its income distribution consequences remain unexplored. Indeed, throughout the decade, the observed rapid surge in manufacturing exports appear to have been accompanied by faltering rates of capital accumulation and a deterioration in the purchasing power of the working classes. Although there are references to the problem in the Turkish literature (see, for example, Celasun, 1989; Yeldan, 1993; Boratav, 1992), a formal analysis of the linkages between export expansion and income redistribution is yet to be undertaken.