Exploring the role of voluntary business associations on borrowed institutionalism in regional development: insights from the case of Kayseri in Türkiye

ABSTRACT

Institutional and cultural traditions, usually shaped by non-economic factors, help to reduce the transaction costs of firms, particularly the costs of knowledge transfer. This study attempts to explain the effects of non-economic factors over voluntary business associations (BAs) and highlight the concept of “borrowed institutionalism” to illustrate the constructive and destructive power of BAs in their use of their relationships with the political establishment for their members. In Türkiye, BAs are not only economic actors but are also embedded in social forms that contain secular or conservative characteristics. While, the structures of these associations that operate within various ideologies can contribute to the institutional setting, they can also hinder the economic potential of a region by developing love or hate relations with the respective political structures. This forms the basis of the concept of “borrowed institutionalism” introduced in this study. Kayseri, which is one of Türkiye’s successful production centers with its unique socio-political characteristics, and predominantly home to small- and medium-sized enterprises (SMEs) appears to be a critical case to analyze the role of BAs. The findings from Kayseri case study support the idea that both secular and conservative forms of BAs can cyclically be constructive or destructive for their members and create borrowed institutionalism based on non-inclusive institutionalism.

KEYWORDS:

• voluntary business associations
• borrowed institutionalism
• ideologies
• regional development
• Kayseri-Türkiye

Disclosure statement

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

Notes

1. The historical relationship between the Gülen Community and the ruling government has been complex and has undergone significant changes over time. Initially, the Gülen community, led by Fethullah Gülen, gained prominence and influence in Türkiye through its network of educational institutions, media outlets, and business ventures. During the 1990s and early 2000s, the community was seen as having a mutually beneficial relationship with the ruling Justice and Development Party (AKP), then led by Recep Tayyip Erdogan. The Gülen movement supported the AKP’s rise to power and shared similar conservative values, including a focus on religious values and social welfare programs. However, tensions and conflicts started to emerge between the Gülen community and the ruling government in the late 2000s. The major breaking point was the corruption investigations in 2013, known as the “December 17–25 operations.” These investigations implicated high-ranking government officials, including close allies of President Erdogan, in corruption allegations. The government accused the Gülen movement of orchestrating the investigations as part of a power struggle and launched a crackdown on Gülen-affiliated individuals and institutions. On the night of July 15, 2016, a faction within the Turkish military attempted to overthrow the government of President Erdogan. The coup was carried out by a group of military officers who sought to seize control of key institutions and impose martial law. During the coup attempt, military forces blocked bridges, seized airports, and took over media outlets. After a night of clashes and violence, the government regained control and declared the coup attempt to be foiled. The aftermath of the coup led to a series of widespread purges and arrests, targeting individuals and institutions believed to be affiliated with the alleged mastermind of the coup, Fethullah Gülen. The coup attempt and its aftermath had significant political, social, and economic repercussions in Türkiye. The government has labeled the Gülen movement as a terrorist organization, known as the Fethullahist Terrorist Organization (FETÖ), and has conducted widespread purges and arrests targeting Gülen followers in various sectors of society, including the judiciary, military, education, business, and media. Overall, the historical relationship between the Gülen Community and the ruling government has shifted from cooperation and mutual support to open conflict and confrontation, leading to a profound impact on Turkish politics and society.

2. Some people believe that the first syllable of MUSIAD is referring to Muslims. So, they believe the idea that MUSIAD is an organization of only Muslims.

Additional information

Funding

The field study of the research was conducted as part of a dissertation project funded by the Ankara University Scientific Research Fund [14L0649002].