The ties that don’t bind: trading state debates and role of state capacity in Turkish foreign policy

ABSTRACT

The literature on trading states has advanced our understanding of foreign economic policy dynamics, but what constitutes a proper trading state and determines its resilience remains somewhat unclear. This article contributes to the literature by developing a political economy framework to assess the role of ‘state capacity’ in conditioning Turkey’s foreign economic policies. Using Turkey as a case, we argue that states are more likely to show suboptimal economic engagement in case of weak state capacity, as (i) they fail to pursue effective industrial policy resulting in low exit costs, (ii) business elites cannot put pressure on the political leadership for the preservation of existing trade ties in the event of an external shock, and (iii) weak financial support mechanisms lead to insufficient assistance to national firms operating abroad.

KEYWORDS:

• Trading state
• state capacity
• foreign economic policy
• developmental foreign policy
• Turkish foreign policy

Acknowledgments

We would like to thank the SEEBSS editorial team and two anonymous reviewers for their insightful comments. We also extend our thanks to Ziya Öniş for his feedback on earlier drafts of the paper. Part of this work was supported by The Global Challenges Research Fund (GCRF) Institutional Block Grant (48240AY), City, University of London.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. Our interviewees were affiliated with key organizations responsible from economy, innovation, and R&D policy, including the Scientific and Technological Research Council of Turkey (TÜBİTAK), the Small and Medium Enterprises Development Organization (KOSGEB), the Ministry of Development, the Ministry of Science, Industry, and Technology, and the Technology Development Foundation of Turkey. We also conducted interviews with experts on Turkish foreign policy, who were also members of key committees advising high state officials. This article emerged as part of the authors’ long-term research agenda on the subject matter and builds upon their previous works. For the political economy of Turkey’s developmental performance, see Kutlay and Karaoğuz (2018); for trading state debates in and political economy of Turkish foreign policy, see, among others, Kutlay and Karaoğuz (2020); Kutlay (2012) and Kutlay (2021).

2. Interview conducted with a bureaucrat working at KOSGEB at the time of the interview in December 2015.

3. Interview conducted with a bureaucrat working at KOSGEB at the time of the interview in January 2016.

4. For instance, see Presidency of The Republic of Turkey. (28 December 2017). Kendi Teknolojimizi Üretmezsek Gerçek Manada Bağımsız Olamayız. Retrieved from https://www.tccb.gov.tr/haberler/410/87923/kendi-teknolojimizi-uretmezsek-gercek-manada-bagimsiz-olamayiz.html (accessed: 18 July 2022).

5. Interview conducted with a bureaucrat working at TÜBİTAK at the time of the interview in November 2014.

6. The report is available via Turkish Contractors Association website, https://www.tmb.org.tr/files/doc/1623914018902-ydmh-en.pdf (accessed: 18 July 2022).

7. TEYDEB statistics. Retrieved from https://www.tubitak.gov.tr/sites/default/files/292/teydeb_istatistikler_2018_8mart.pdf (accessed: 18 July 2022).

8. TÜSİAD’s reflections on the draft technopark law. Retrieved from https://www.tusiad.org/tr/bilgi-merkezi/item/download/2300_cdc58da1008d9e786859e31922794375 (21 September 2019).

9. ‘2017 Yılına Girerken Dış Politikamız’, Dışişleri Bakanlığı, http://www.mfa.gov.tr/site_media/html/2017-yili-basinda-dis-politikamiz.pdf (accessed 2 May 2020).

10. ‘Dışişleri Bakanlığı 2015 Faaliyet Raporu’, p.13, http://www.mfa.gov.tr/data/BAKANLIK/2015-faaliyet-raporu_.pdf, (accessed: 11 May 2022) and ‘Dışişleri Bakanlığı 2019–2023 Stratejik Planı’, https://www.mfa.gov.tr/data/BAKANLIK/2019-2023-stratejik-plani.pdf, (accessed: 23 May 2022).

11. Zuhal Mansfield, Chairperson of Turkish-Egyptian Business Council, Vice Coordinating Chairperson of Turkish-African Business Councils, and other roles. https://www.youtube.com/watch?v=FbF7VArzwOU, (12 October 2019).

12. Ibid.

13. On the political economy of authoritarianism in Turkey, see Esen and Gumuscu (2018).

14. See for instance, MÜSİAD (2011, 85, 93); and a joint report prepared by the then Turkish Ministry of Economy, the Undersecretariat of Treasury, the Export Credit Bank of Turkey, and DEİK. Retrieved from DEİK website, https://www.deik.org.tr/uploads/9f40867f6c2041a4a68cc49013d34ece.DOC (20 September 2019).

15. M. Şamil Çapar. Retrieved from https://www.youtube.com/watch?v=Ln9PUcn3Bwc (20 September 2019). Also, for China’s overseas economic activity as part of the ‘internationalization of the [Chinese] developmental state’, see Bräutigam and Xiaoyang (2012).

16. Retrieved from DEİK website. https://www.deik.org.tr/uploads/9f40867f6c2041a4a68cc49013d34ece.DOC, (20 September 2019).

17. See for instance: https://www.deik.org.tr/uploads/9f40867f6c2041a4a68cc49013d34ece.DOC, (20 September 2019).

Additional information

Funding

Part of this work was supported by the Global Challenges Research Fund (GCRF) Institutional Block Grant (48240AY), City, University of London.

Notes on contributors

Hüseyin Emrah Karaoğuz

H. Emrah Karaoğuz Dr is an assistant professor at Kadir Has University, International Relations department. His research is mainly on international political economy, political economy of development, and technological nationalism. His articles have appeared in Third World Quarterly, Globalizations, Turkish Studies, Journal of Balkan and Near Eastern Studies among others.

Mustafa Kutlay

Mustafa Kutlay Dr is senior lecturer at the Department of International Politics at City University of London. Dr Kutlay works on comparative politics, political economy, emerging powers, and global South. His articles appeared in International Affairs, The British Journal of Politics and International Relations, Government and Opposition and Third World Quarterly, among others.