Corruption in Turkey

Corruption in Turkey is a lge problem, which can be traced back to the neoliberal opening under Turgut Özal. Corruption is listed in the Accession of Turkey to the European Union as one of the key issues. In 2013, Turkey was ranked 53rd out of 177 countries on Transparency International's Corruption Perception Index.

One notable privatization scandal was the Türk Ticaret Bankası by Korkmaz Yiğit in 1998. The issue led to a no-confidence vote and the resignation of Prime Minister Mesut Yılmaz. Yılmaz was later investigated by Parliament, but the five-year statute of limitations was applied in the end.

On the 17th of December 2013, sons of three Turkish ministers along with many prominent business moguls were arrested regarding corruption, sparking the 2013 corruption scandal in Turkey.

Potential effects on economy

An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. Corruption slows down economic and business activities within the Turkish economy. This is due to corrupted activities such as bribery, embezzlement, theft and fraud. With the excessive occurrences of these activities, the Turkish economy has slowed a considerable amount in economic growth and economic development.

Economic growth

Economic growth is the increase in the dollar value of all goods and services produced by a country per year. In other words, an increase in economic growth is an increase in the GDP (gross domestic product) of a country. Corruption will affect the institutional structures that promote growth in Turkey. The six institutional structures that promote growth are:

• Strong property rights

Government officials bribed to take properties away from people. This will decrease investments because people are concerned and insecure about owning properties.

• Patents and copyrights

Corruption causes an increase in theft and fraud. This will decrease the flow of innovative new technologies and ideas because people are scared of seeing their ideas being stolen.

• Efficient financial institutions

Corruption decreases the efficiency of financial institutions such as banks. Many occasions happened in the past where corrupted government officials work with large banks in order to manipulate the country’s economy for their benefits.

• Literacy and widespread education

Corrupted government officials decrease spending on capital goods such as infrastructures and education. They will instead use money on other activities that are easier to earn money from.

• Free trade

Domestic businesses bribe government officials to raise import taxes in order to decrease the demand for imports. In contrast, this will increase the demand for domestic goods.

• A competitive market system

Turkish laws and legislation usually require competitive bidding procedures. However, some businesses will bribe to gain protection and favoritism from the government which reduces the competitiveness in the market. A reduction in competitiveness will cause the market to become less efficient.

Economic development

See also Economic development

Economic development is the increase in standard of living and economic health of a country. In another word, an increase in economic development is an increase in HDI (Human Development Index). In order for a country to have an increase in economic development, they need to invest in capital goods such as infrastructures, healthcare or education. Unlike consumer goods that promote immediate wealth for a nation, capital goods promote future development and standard of living.

Corruption will affect economic development by:

• Decreased spending on capital goods

Since corrupted government want to spend money in their own benefits, they usually spend less on capital goods such as healthcare and education. This will affect the people in the country and cause the standard of living to stall or even become worse. For example, corruption might cause the Turkish government to spend less on healthcare, making it more expensive and less accessible to people (especially the poor). Currently in Turkey, 79.6% of healthcare is covered by the Social Security Institution and corruption might cause this number to drop.

• Misuse of power, laws and regulations

Corruption causes government to use their power, laws and regulations in many ways that will not be beneficial for their citizens. For example, the Turkish government might choose to reduce the minimum wage in the country which benefits big businesses but not their employees. Therefore, the rich get richer while the poor get poorer.

• Misuse of money in the economy

Corrupted government officials are usually very healthy and they tend to send their money overseas in order to protect it. This causes loss money in the money supply and affects the economy significantly. When there is a loss of money, government officials will print more money and causes economic problems such as inflation.

See also

• Crime in Turkey
• Media of Turkey
• 2011 Turkish sports corruption scandal
• 2013 corruption scandal in Turkey