Analysis of Growth and Inclusivity in the Turkish Economy Over the Last 24 Years
A new study based on TURKSTAT data examines the inclusivity of the Turkish economy's growth process over the past twenty-four years and its effects on income distribution.
The growth and inflation preferences of politicians, along with the inclusivity of Turkey's economic growth over the past 24-year period, are evaluated in a new study based on TURKSTAT data.
Political Preferences and Growth
It is generally difficult for politicians to compromise on growth, and when they have to choose between growth and inflation, they mostly consent to inflation.
The main reason behind this preference is not ideology, but political pragmatism, which is seen as an important condition for governments to produce political consent.
Growth and Inclusivity
The fact that economic growth leads to an increase in the incomes of broad masses of people is among the fundamental criteria indicating the inclusivity of that growth. If a narrow segment monopolizes the benefits of growth, it is not possible to speak of such economic growth as being inclusive.
Research Based on TURKSTAT Data
Prepared by Ayşe Aylin Bayar alongside Haluk Levent, the research was conducted utilizing data from the TURKSTAT income and living conditions survey. Based on calculations carried out at the household level, this study sheds light on the growth inclusivity of the past twenty-four-year period.
Three Key Findings of the Research
According to the first finding revealed by the research, as economic growth declines in the country, the inclusivity of growth decreases at the same rate. Secondly, if income inequality is a source of concern for politicians, high inclusivity rather than the level of growth matters. The third main result is that positive growth is important in producing political consent, but inclusivity is much more critical than that.
Current Economic Developments
The Turkish economy has recently gone through serious economic and financial turmoil, and generating growth has become increasingly difficult. Following the fund crisis experienced, all growth projections for the year 2026 have been revised downward.
Income Distribution and Injustice
Even if the economy can grow positively at limited levels, today's troubles lead to a decrease in the inclusivity of this growth. This situation increases income distribution injustice and causes a decrease in the support for politicians from segments disturbed by the situation.