State-Business Alliances and Economic Development: Turkey, Mexico and North Africa

257 Pages·2015·3.485 MB·English

by  Işık Özel

State–Business Alliances and
Economic Development
This book argues that a key dynamic behind economic development in the
emerging markets is the coordination between the state and businesses.
Exploring the links between institutions, state–business alliances and economic
development in the context of tumultuous market transitions since the 1980s, the
book tackles the formation and sustainability of coordination-i nducing institu-
tions besides their mere existence, and points out the new modalities of coordin-
ation in the age of new developmentalism. Based on extensive original research
in Turkey and Mexico embedded in a comparative historical analysis, the book
shows how state–business alliances have been formed, collapsed and re-f ormed
between the respective states and shifting business actors since the launching of
market transitions. It demonstrates how both the state and business actors, and
their cohesiveness vs. fragmentation, play crucial roles in the making and
sustainability of the institutions, which are central to state–business alliances. It
explores the emergence of new actors, the diversification of the organizational
landscape, and the evolution of the ways in which the states interacted with busi-
nesses throughout major economic and political transformations that helped
transform the respective states and their interactions with the non-s tate actors. It
draws on the meandering developmental trajectories of Turkey and Mexico from
the 1970s to the present and goes on to draw some lessons for institution-
building and market reforms in selected countries in North Africa.
Işık Özel is Associate Professor of Political Science at Sabancı University,
Istanbul, Turkey.
The Routledge Political Economy of the Middle East
and North Africa Series
Series editor: Hassan Hakimian
London Middle East Institute,
School of Oriental and African Studies,
University of London
The aim of the London Middle East Institute (LMEI), through education and
research, is to promote knowledge of all aspects of the Middle East including its
complexities, problems, achievements and assets, both among the general public
and those who have specialist interests in the region.
The LMEI is based in the School of Oriental and African Studies (SOAS), which
hosts the largest concentration of Middle Eastern expertise in any European univer-
sity. The LMEI provides teaching, training, research, publication, consultancy, out-
reach and other services related to the Middle East. It serves as a neutral forum for
the study of issues concerning the region and helps to link individuals and institu-
tions with academic, commercial, diplomatic, media or other specialisations.
Editorial board
David Cobham, Professor of Economics at Heriot Watt University, UK.
Nu’man Kanafani, Associate Professor of Economics at the University of
Copenhagen, Denmark.
Massoud Karshenas, Professor of Economics at the School of Oriental and
African Studies (SOAS), University of London, UK.
Jeffrey B. Nugent, Professor of Economics at the University of Southern Cali-
fornia, Los Angeles, USA.
Jennifer Olmsted, Associate Professor of Economics at Drew University, New
Jersey, USA.
Karen Pfeifer, Professor of Economics at Smith College, Northampton, Massa-
chusetts, USA.
Wassim Shahin, Professor of Economics and Dean of Business School at the
Lebanese American University (LAU), Byblos, Lebanon.
Subidey Togan, Professor of Economics and Director of the Centre for Inter-
national Economics at Bilkent University, Ankara, Turkey.
Jackline Wahba, Reader in Economics at the University of Southampton, UK.
Tarik Yousef, Dean of the Dubai School of Government, UAE.
1 Trade Policy and Economic Integration in the Middle East and North
Africa
Economic boundaries in flux
Edited by Hassan Hakimian and Jeffrey B. Nugent
2 State Formation in Palestine
Viability and governance during a social transformation
Edited by Mushtaq Husain Khan
3 Palestinian Labour Migration to Israel
Land, labour and migration
Leila H Farsakh
4 Islam and the Everyday World
Public policy dilemmas
Edited by Sohrab Behdad and Farhad Nomani
5 Monetary Policy and Central Banking in the Middle East and North
Africa
Edited by David Cobham and Ghassan Dibeh
6 Economic Performance in the Middle East and North Africa
Institutions, corruption and reform
Edited by Serdar Sayan
7 Economic Liberalization and Turkey
Sübidey Togan
8 The Political Economy of Aid in Palestine
Relief from conflict or development delayed?
Sahar Taghdisi- Rad
9 Money in the Middle East and North Africa
Monetary policy frameworks and strategies
Edited by David Cobham and Ghassan Dibeh
10 Iran’s Struggle for Economic Independence
Reform and counter-r eform in the post-r evolutionary era
Evaleila Pesaran
11 Economic and Trade Policies in the Arab World
Employment, poverty reduction and integration
Edited by Mahmoud A.T. Elkhafif, Sahar Taghdisi- Rad and
Mutasim Elagraa
12 Iran and the Global Economy
Petro populism, Islam and economic sanctions
Edited by Parvin Alizadeh and Hassan Hakimian
13 State–Business Alliances and Economic Development
Turkey, Mexico and North Africa
Işık Özel
State–Business Alliances and
Economic Development
Turkey, Mexico and North Africa
Işık Özel
First published 2015
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2015 Işık Özel
The right of Işık Özel to be identified as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilized in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Özel, Isik, author.
State-business alliances and economic development : Turkey, Mexico and
North Africa / Isik Özel.
pages cm. – (Routledge Political economy of the Middle East and North
Africa series; 13)
1. Industrial policy–Mexico. 2. Industrial policy–Turkey. 3. Industrial
policy–Africa, North. 4. Business and politics–Mexico. 5. Business and
politics–Turkey. 6. Business and politics–Africa, North. 7. Mexico–
Economic conditions. 8. Turkey–Economic conditions. 9. Africa,
North–Economic conditions. I. Title. II. Series: Routledge political
economy of the Middle East and North Africa series ; 13.
HD3616.M43O94 2014
322.3–dc23 2013050695
ISBN: 978-0-415-52980-8 (hbk)
ISBN: 978-1-315-81875-7 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
Contents
List of figures x
List of tables xi
List of abbreviations xii
Acknowledgements xiv
Introduction 1
Why Mexico and Turkey? A case for the cases 6
Model, data, and methods 11
The plan of the book 11
1 Market transitions, business, and the state in emerging countries 13
Adjusting in coordination: actors and institutions 18
Formation and evolution of institutions: coordination between
state and business 24
2 Diverging pioneers: trajectories of Mexico and Turkey in
the first phases of market transitions 28
Introduction 28
Antecedents of market reforms and reform alliances: the ISI pact,
crises and the responses 29
Zigzagging reforms and shaky alliances in Turkey 40
Concessions and emergence of a narrow alliance in Mexico 49
Conclusion 56
3 Increasing fragmentation and weak coordination in Turkey 58
Introduction 58
Turkish business: increasing fragmentation in the first phase of
market transitions 59
The Turkish state: fragmentation and de-i nstitutionalization 70
Conclusion 79
viii Contents
4 Increasing cohesiveness and coordination in Mexico in the
first phase of the transitions 82
Introduction 82
Gradual emergence of business cohesiveness 82
Increasing state cohesiveness in the first phase of transitions 89
Increasing coordination through cohesive actors 92
Conclusion 102
5 Tamed by crises, eager to build institutions: the second
phase of market transitions in Mexico and Turkey 105
Introduction 105
The rise of a regulatory state in Mexico? 107
The rise of a regulatory state in Turkey? 112
Resilient, but vulnerable: Turkish and Mexican economies
encountering the 2008 crisis 125
Conclusion 131
6 Increasing cohesiveness and a big spurt in Turkey 134
Introduction 134
Becoming cohesive with a twist: polar cohesiveness in the
making 136
Rising state cohesion: increasing capacity and institution
building 147
Increasing coordination between the state and business 149
Conclusion 155
7 Increasing fragmentation, institutional change, and
slowdown in the second phase of transitions in Mexico 158
Increasing fragmentation within business 159
Diminishing state cohesiveness 168
Ad hoc coordination in the second phase of the transitions:
lobbying vs. concertation 169
Conclusion 172
8 Market transitions and state–business alliances in selected
MENA countries 175
Introduction 175
State–business relations at the juncture of transitions in
MENA 177
Fragmentation, cronyism, and hesitant opening: the case of
Egypt 184
Contents ix
Increasing cohesion and coordination: the case of Morocco 192
Increasing fragmentation and repression: the case of Tunisia 195
Conclusion 198
9 Concluding remarks 200
Institutions, transitions, and challenges ahead 200
Material incentives and value systems 206
Lessons for MENA countries 208
Appendix: list of interviewees 211
Bibliography 213
Index 232