Corruption in Turkey

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Corruption in Turkey is a large problem which can be traced to the neoliberal policy implications under Turgut Özal.[1] Corruption is listed in the Accession of Turkey to the European Union as one of the key issues.[2][3] In 2013, Turkey was ranked 53rd among 177 countries on Transparency International's Corruption Perception Index. [4]

One notable privatization scandal was the Türk Ticaret Bankası by Korkmaz Yiğit in 1991. The issue led to a no-confidence motion and the resignation of Prime Minister Mesut Yılmaz. Yılmaz was later investigated by Parliament, but the five-year statute of limitations was applied, which prevented further action.[5][6]

On 17 December 2013, sons of three Turkish ministers along with many prominent business moguls were arrested and accused of corruption, sparking the 2013 corruption scandal in Turkey.

Potential effects on economy[edit]

An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. Corruption has slowed down business activities along with the growth of the Turkish economy. These practices labeled as corruption include bribery, embezzlement, theft, and fraud.

Economic growth[edit]

Economic growth is the increase in the dollar value of all goods and services produced by a country per year. In other words, an increase in economic growth is an increase in the GDP (gross domestic product) of a country. Corruption will affect the institutional structures that promote growth in Turkey. The six institutional structures that promote growth are:

Government officials bribed to take properties away from people. This will decrease investments because people are concerned and insecure about owning properties.
Corruption causes an increase in theft and fraud. This will decrease the flow of innovative new technologies and ideas because people are nervous in submitting new ideas when others can duplicate it easily.
Corruption decreases the efficiency of financial institutions such as banks. Many occasions happened in the past where corrupted government officials work with large banks in order to manipulate the country’s economy for their benefits. This hereby decreases the trust placed in the institution.
Corrupted government officials decrease spending on capital goods such as infrastructures and education. They will instead use money on other activities that are easier to earn money from.
Domestic businesses bribe government officials to raise import taxes in order to decrease the demand for imports. In contrast, this will increase the demand for domestic goods.
Turkish laws and legislation usually require competitive bidding procedures. However, some businesses will attempt to bribe in order to gain protection and favoritism from the government which reduces the competitiveness in the market. A reduction in competitiveness will cause the market to become less efficient. This again enters into the cycle of some companies or people monopolizing the market.

Economic development[edit]

See also Economic development

Economic development is the increase in standard of living and economic health of a country and thus also increases the HDI (Human Development Index). In order for a country to have an increase in economic development, they need to invest in capital goods such as infrastructures, healthcare or education. Unlike consumer goods that promote immediate wealth for a nation, capital goods promote future development and standard of living.

Corruption will affect economic development by:

Due to inappropriate spending a corrupted government will spend less on capital goods such as healthcare and education. This will affect the people in the country and cause the standard of living to stall or worsen. For example, corruption might cause the Turkish government to spend less on healthcare, making it more expensive and less accessible to people (especially the poor). Currently in Turkey, 79.6% of healthcare is covered by the Social Security Institution and corruption might cause this number to drop.
  • Misuse of power, laws and regulations
Corruption causes government to use their power, laws and regulations in many ways that will not be beneficial for their citizens. For example, the Turkish government might choose to reduce the minimum wage in the country which benefits big businesses but not their employees. Therefore, the rich get richer while the poor get poorer.
  • Misuse of money in the economy
Corrupted government officials are usually very healthy and they tend to send their money overseas in order to protect it. This causes loss money in the money supply and affects the economy significantly. When there is a loss of money, government officials will print more money and causes economic problems such as inflation.

See also[edit]

References[edit]

  1. ^ Z Baran (2000), Corruption: the Turkish challenge, Journal of International Affairs 54, Fall 2000.
  2. ^ Michael, Bryane , Anti-Corruption in the Turkey's EU Accession. Turkish Policy Quarterly, Vol. 3, No. 4, Winter 2004. Available at SSRN: http://ssrn.com/abstract=999350
  3. ^ Alan Doig, (2010) "Asking the right questions? Addressing corruption and EU accession: The case study of Turkey", Journal of Financial Crime, Vol. 17 Iss: 1, pp.9 - 21
  4. ^ Corruption Perceptions Index 2013. Full table and rankings. Transparency International. Retrieved: 8 December 2013.
  5. ^ Zeynep Sarlak and Besim Bulent Bali (2007), Corruption in Turkey:“Is the donor content when the recipient is content?!, University of Konstanz Discussion Paper Series 9.
  6. ^ Zeynep Sarlak and Besim Bulent Bali (2008), Corruption in Turkey: Why cannot an urgent problem be a main concern?

External links[edit]