The Complementary Roots of Growth and Development: Comparative Analysis of the United States, South Korea, and Turkey

190 Pages·2018·2.36 MB·English

by  Taner Akan (auth.)

THE COMPLEMENTARY
ROOTS OF GROWTH
AND DEVELOPMENT
Comparative Analysis of
the United States,
South Korea, and Turkey
Taner Akan
The Complementary Roots of Growth and
Development
Taner Akan
The Complementary
Roots of Growth and
Development
Comparative Analysis of the United
States, South Korea, and Turkey
Taner Akan
Department of Economics, Istanbul University
Istanbul, Turkey
Department of International Development
King’s College London, London, UK
ISBN 978-3-319-68931-9 ISBN 978-3-319-68932-6 (eBook)
https://doi.org/10.1007/978-3-319-68932-6
Library of Congress Control Number: 2017955940
© The Editor(s) (if applicable) and The Author(s) 2018
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About the Book
The common institutional roots of success and failure in economic
growth and development (G&D) lie in the systemic governance and frag-
mentation of institutional complementarities, respectively, but not in the
unilateral adaptation of market-led or state-led models. This book utilizes
case countries such as the United States, South Korea, and Turkey—an
advanced and developed, a newly developed, and a developing country,
respectively—to adjudge how G&D succeeded or failed under market-
led or state-led models. Akan provides a simple framework for under-
standing two points which go beyond ideological obsession. The first is
how a model of G&D works and evolves, with its economic, financial,
industrial, and political dynamics intertwining. The second is why a
market- led or state-led model succeeds and fails in both developed and
developing countries.
v
Contents
1 Systemic Governance and the Fragmentation
of Institutional Complementarities 1
2 Rise and Fall of the Market-Led Model: The United States 17
3 Rise and Fall of the State-Led Model: South Korea 77
4 Neither by State Nor by Market: The Turkish Case 129
Index 169
vii
List of Abbreviations and Acronyms
AKP Justice and Development Party of Turkey
BOK Bank of Korea
CEA Council of Economic Advisers
ERP Economic Report of the President
FCIC Financial Crisis Inquiry Commission
FED Federal Reserve System
FEP Full employment period
G&D Growth and development
GDP Gross domestic product
GRP Great Recession Period
GSNP Great Stagnation Period
GSP Great Stagflation Period
IC Institutional complementarity
IMF International Monetary Fund
NIC Negative institutional complementarity
NLP Neoliberal period
NSTC National Science and Technology Council
OECD Organisation for Economic Co-operation and Development
OPEC Organization of the Petroleum Exporting Countries
PE Political economy
PIC Positive institutional complementarity
PSBR Public sector borrowing requirement
PTP Priority Transformation Program
ix
x List of Abbreviations and Acronyms
R&D Research and development
SMEs Small- and medium-sized enterprises
SOEs State-owned enterprises
SPEC Securities and Exchange Commission
TCMB Turkish Central Bank
TKB Turkish Ministry of Development
WTO World Trade Organization
List of Figures
Fig. 2.1 Home prices and money growth in the United States, annual
change %, 1948–2015 40
Fig. 2.2 Total asset-backed and mortgage-backed securities as %
of GDP, 1983–2015 42
Fig. 2.3 Stock prices in the United States, annual change %,
1948–2015 46
Fig. 2.4 Stock earnings in the United States, annual change %,
1948–2015 47
Fig. 2.5 Democrats’ and Republicans’ economic performance,
1947–2015 66
Fig. 3.1 Basic indicators of South Korean economy, 1961–2015 78
Fig. 3.2 Sectoral value added by technological intensity, 1970–2009 106
Fig. 3.3 Labor productivity and real wages in South Korea,
1971–2015 117
Fig. 4.1 Market capitalization, foreign debt, and trade union density
in Turkey, 1988–2012 141
Fig. 4.2 Labor productivity and real wages in Turkish manufacturing
sector, 1961–2001 141
Fig. 4.3 Total domestic savings and gross fixed investments in
Turkey, 1975–2010 142
xi
List of Tables
Table 1.1 Selected models of systemic governance in G&D 8
Table 2.1 Macroeconomic indicators of American economy,
1948–2015 31
Table 2.2 Shares of aggregate income and Gini coefficient in the
United States, 1967–2015 32
Table 2.3 Financial indicators of American economy as % of
GDP, 1950–2015 48
Table 3.1 The presidents and incumbent parties in the South Korean
politics, 1948–2016 109
Table 4.1 The incumbent parties in Turkey, 1960–2017 132
Table 4.2 Major macroeconomic variables of Turkish economy,
1960–2012 137
Table 4.3 A taxonomy of Turkish businesses 139
Table 4.4 Major indicators of structural change in selected countries 144
Table 4.5 Medium-high and high-tech exports and imports in
Turkey, Mexico, and South Korea, 1995–2009 145
Table 4.6 The preparatory stages of Turkish development plans
in the 1960s 147
Table 4.7 Industrial policy expectations of major sectors in Turkey 148
xiii