Yilmaz Akyüz

The Making of the Turkish Financial Crisis

There can be little doubt that at the turn of the century the Turkish economy was in need of an urgent stabilization in order to halt a treacherous process of high and volatile inflation, unsustainable public debt accumulation, and increasing financial fragility, resulting from irresponsible policies and lack of fiscal discipline that had been endemic under various governments since the early 1980s. However, the stabilization program formulated and launched with strong support from the IMF failed to deliver its promises, plunging the economy into an unprecedented crisis, in large part because of serious shortcomings in its design as well as in crisis intervention which appears to have drawn no useful lessons from the recent bouts of crises in emerging markets.

New perspectives on East Asian development

Conventional explanations of rapid growth in East Asia have focused on the efficient allocation of resources resulting from market-led outward-oriented strategies. This study challenges that approach. East Asian success has centred around the accumulation dynamic both because of its direct importance to the growth process and also because of its close and interdependent linkages with exports. On this basis the study considers the institutions and policies which were used to manage economic rents in support of rapid growth and to ensure a more strategic and orderly integration into the world economy. The study also examines the contribution of regional trade and investment flows to East Asian industrialisation. The potential for replicating similar strategies is considered.

The investment-profits nexus in East Asian industrialization

Abstract Both orthodox and heterodox interpretations of East Asian industrialization have concentrated on questions of resource allocation, and neglected overall capital accumulation and the role of government in accelerating it. This paper argues that corporate profits and other profit-related incomes were the main source of investment in the most successful East Asian economies. Government policies played a major role in promoting capital accumulation by creating rents and animating the dynamic interactions between profits and investment. This was achieved through a broader set of measures than those usually identified as “selective industrial policies.”

Export Dependence and Sustainability of Growth in China

This paper examines the contribution of exports to growth in China since the early years of the decade. It is estimated that, despite a high import content ranging between 40 and 50 percent, approximately one-third of Chinese growth before the global crisis was a result of exports, due to their phenomenal growth of some 25 percent per annum. This figure increases to 50 percent if spillovers to consumption and investment are allowed for. The main reason for excessive dependence on foreign markets is underconsumption. This is due not so much to a high share of household savings in GDP as to a low share of household income and a high share of profits. It is argued that China can no longer maintain such high growth rates for its exports, and, therefore, needs to turn to consumption-led growth by expanding the share of wages and household income in GDP and accelerating public spending in social infrastructure.

Global rules and markets: constraints over policy autonomy in developing countries

This paper examines in an integrated manner the multiple dimensions of what has come to be called the “policy space” or “policy autonomy” of developing countries, i.e. their ability to calibrate national policies to local conditions and needs (especially with respect to their development objectives and capacity to foster conditions for steady quality employment growth) in relation to global economic rules and practices. After a brief discussion of the concept of policy autonomy, the paper focuses on the sources of the constraints, the rationale for multilateral rules as a global collective action, the nature of existing multilateral disciplines and their relative impact on policy space in developed and developing countries. This is followed by a discussion of the constraints exerted by multilateral rules and practices on development policy in four key areas: industrial tariffs, industrial subsidies, investment and technology policies. The paper then concentrates on macroeconomic policies and examines the extent to which they are circumscribed by influences associated with external financing, both private and official.

Küresel Kurallar ve Piyasalar: Gelişmekte Olan Ülkelerde Özerk Politika Üzerindeki Kısıtlar

Son yillarda, gelismekte olan ulkeler, yakin tarihte daha once hic gorulmemis bir hizla disa acilmis ve dunya ekonomisiyle butunlesmistir. Bu surec bazi alanlarda kazanimlara yol acmis, ancak bu kazanimlarin dagilimi ulkeler arasinda ve icinde farklilik gostermistir. Daha da onemlisi, hizli serbestlesme ve butunlesme gelismekte olan dunyada ozellikle yoksul ve ayricaliksiz siniflarin konumlarinda kaymalara yolacmistir. Bu durum, politika belirleyiciler uzerinde yogun bir baski yaratir ve politika ultetme surecinde esneklik gerektirirken, uluslararasi kurallar ve yukumluluklerin yayginlasmasi ve kuresel piyasalardan gelen baskilar, geleneksel kalkinma ve makroekonomik politika araclarinin etkisiz kalmasi veya kullanilamaz hale gelmesi sonucunu dogurmustur. Bu nedenle ulusal ekonomik politikalari uzerindeki global kisitlarin kalkinma ile bagdasip bagdasmadigi sorgulanmaya baslamistir. Bu yazida bu sorun ele alinmaktadir.

Great Controversies: Developing Countries and the Collapse of the Doha Round: A Forum

The World Trade Organization round of negotiations first established at Doha, Qatar, in 2001 collapsed in the summer of 2006. To many, this was an unimaginable failure and one of the largest obstacles the long march toward worldwide free trade had ever faced. But we asked three observers with less conventional views to express their opinions on why the Doha Round failed and what the consequences may be. Written in August and September, their perceptive comments and prognoses follow.

Trade and Industrial Upgrading in Developing Countries

It is generally accepted that capital accumulation can help raise per capita income and living standards in an economy simply by allowing a fuller use of underutilized labor and natural resources without altering the efficiency with which resources are utilized. Long-term economic success, however, depends on sustained improvements in productivity; each worker producing more from any given level of effort provides the basis for rising incomes and living standards. In this sense, it is productivity gains, and not simply additional jobs, that characterize a virtuous process of accumulation and growth. Such a process is invariably associated with structural changes in output and employment as a result of both shifts in economic activities across agriculture, industry, and services and upgrading to higher value-added activities within each sector through the introduction of new products and processes. The importance of structure to the development process is partly due to the fact that the overall level of income is closely linked to the allocation of resources among sectors, and the sectors can show, at any point in time, significant variations in productivity levels. But it also derives from differences in the potential of various sectors for technical progress and productivity growth. Such differences emerge not only in the broad division of sectors into agriculture, mining, manufacturing, and services, but also in intra-sectoral structures.