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Published online by Cambridge University Press: 29 January 2009
As promotion of economic growth becomes a declared aim of policy-makers in less developed countries (LDC), more and more emphasis is placed on the public sector as an essential instrument of policy implementation. The public sector is considered more capable of inducing higher rates of savings and of channeling them into development-promoting outlets than the economy can do by itself. State Economic Enterprises (SEE) financed wholly or in large part through government budgets become the instruments of such policies. In an environment where the private sector invests mainly along traditional lines and is shy of long gestation periods, the absorption of modern technology depends on an ability to amass and channel large amounts of finance capital into productive ventures with relatively little direct short-run profitability. The absence of organized markets for equity capital so prevalent in LDC also points in the direction of the state's active participation in economic activities.
page 348 note 1 Albert, H. Hanson, Public Enterprise and Economic Development (London, Kegan Paul Ltd., 1960), chs. 1 and 2.Google Scholar
page 348 note 2 There are economies where at the outset an increase in consumption levels may uplift the productivity so much that the above statement does not apply. I consider this possibility outside the scope of this discussion. On this question see Branko, Horvat, Towards a Theory of Planned Economy (Belgrad, Yugoslav Institute of Economic Research, 1964).Google Scholar
page 348 note 3 Greece and Pakistan may be cited as recent examples of such upheavals.
page 349 note 1 ‘Economic, social and cultural development is based on a plan. Development is carried out according to this plan. The organization and the function of the State Planning Organization…’ (Article 129, Constitution of the Turkish Republic (Ankara, 1961), p. 35).Google Scholar
page 349 note 2 State Planning Organization, ‘Planning in Turkey’, SPO Review, no. I (Ankara, 1963), pp. 4, 5.Google Scholar
page 349 note 3 The informal arrangements and misconceptions about the advisory role that is assigned to SPO have created tensions between the ‘technicians’ and the ‘politicians’ on several occasions. In 1962, for example, many members of the SPO, including all department heads, resigned in protest of the reluctance of the cabinet to accept a plan to reorganize the tax system and to impose taxes on agricultural incomes. Even with the same political party in power after 1964, there have been many resignations from the SPO.
page 350 note 1 State Planning Organization, Notes for the Colloquium on the Technical Aspects of Turkey' Long-Term Plan (Ankara, 05 1962) (mimeo.), p. 6.Google Scholar
page 350 note 2 The projected increase in current public expenditure is to be devoted almost entirely to health education and agricultural extension facilities (ibid. p. 5.
page 351 note 1 Ibid. p. 5.
page 351 note 2 Devlet Planlama Teşkilati, Kalkinma Plant, Beşyil, 1963–1967 (Ankara, 1963) (SPO, Development Plan, First Five Years, 1963–1967), p. 61.Google Scholar
page 351 note 3 K. Plan, Birinci Beşyil, op. cit. p. 59.Google Scholar
page 351 note 4 A study by SPO mentions that the poorest 20 per cent of the population receive about 4.5 per cent of the national income, while the richest 20 per cent, 57 per cent. In agriculture, where 72 per cent of the population of Turkey produced 40 per cent of the GDP in 1960, 90 per cent of the farmers received a mere 48 per cent of agricultural income, while the rich farmers received 52 per cent. SPO, Notes for the Colliquium, pp. 45–7Google Scholar. See, for example, Eva, Hirsch and Abraham, Hirsch, ‘Changes in Agricultural Output Per Capita of Rural Population in Turkey, 1927–60’, Economic Development and Cultural Change, 07 1963.Google Scholar
page 351 note 5 See Table 7, p. 356.
page 353 note 1 The fluctuations in the growth rate can easily be explained by the yearly levels of agricultural output, and hence by climatic conditions. The annual rates of change in agriculture were: 1963, 76; 1964, 0 1965, –30 1966, 86. Ibid. p. 10.
page 355 note 1 See K. Plan, Birinci Beyil, pp. 38–9, 52. The plan does not specify the quantities to be produced by SEE needed to change prices, but the idea is not as far-fetched as it seems at first if we consider that at 1960 the SEE were producing more than 50 per cent of manufacturing output of the whole economy.Google Scholar
page 355 note 1 Plan, K., Ikinci Beşyil, pp. 10, 129.Google Scholar
page 355 note 2 If the migration from rural to urban centers was rapid, and if there were substantial differences between rural and urban incomes, then the above statement does not hold.
page 355 note 3 Called ‘put-up-by-night’ because of their erection in one night on public (and occasionally private) grounds without title or permission. Here are their numbers in cities: 1955, 50,000; 1960, 240,000; 1965, 430,000; 1966, 450,000.
page 356 note 1 Plan, K., Ikinci Beşyil, p. 285.Google Scholar
page 357 note 1 A simple regression analysis between tax revenues and the GNP levels with data from 1950 to 1966, gave the following result: Y = 919.107+0.15164X,(401.87) (0.0092)where Y = tax revenues at current prices and X = GNP at current prices, both estimates significant at 5 per cent level.
page 357 note 2 Seidler, LeeJ., The Function of Accounting in Economic Development: Turkey as a Case Study (Praeger, 1967), ch. 3.Google Scholar
page 357 note 3 IBRD, Development Performance and Prospects of Turkey, p. 35.Google Scholar
page 357 note 4 In 1965 the cost of producing a ton of steel was $195 while the import price cif. Istanbul was $128. It is hoped that the new Eregli (a joint private and public enterprise) will lower production costs.
page 358 note 1 Report of Experts, A Study on the Operation of State Economic Enterprises in Turkey, p. 125.Google Scholar
page 358 note 2 Transfers to SE from the budget were 726, 721 and 613 million T.L. in 1965, 1966 and 1967 respectively. It is estimated to reach 861 in 1968. See OECD, Economic Surveys, Turkey (Paris, 1968), p. 13.Google Scholar