Retreating State? Political Economy of Welfare Regime Change in Turkey

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Retreating State? Political Economy of Welfare Regime Change in Turkey
Article in Middle East Law and Governance · August 2010

DOI: 10.1163/187633710X500739
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Middle East Law and Governance 2 (2009) 152–184 brill.nl/melg
Retreating State? Political Economy of Welfare Regime

Change in Turkey
Mine Eder
Boğazici University, Istanbul, Turkey1
Abstract
Informed by the debates on the transformation of welfare states in advanced industrial econo-
mies, this article evaluates the changing role of the state in welfare provision in Turkey. Turkey’s
welfare state has long been limited and inegalitarian. Strong family ties coupled with indirect and
informal channels of welfare (ranging from agricultural subsidies to informal housing—both
costly but politically expedient) have compensated for the welfare vacuum. At first glance,
Turkey’s welfare reform that emerged from the 2000-2001 fiscal crisis appears like a classic case
of moving towards a minimalist, ‘neoliberal’ welfare regime—with increasingly privatized health
care and private social insurance. The state retreats via the subcontracting of welfare provision to
private actors, growing involvement of charity organizations, and increasing public-private coop-
eration in education, health, and anti-poverty schemes. Yet, there is also evidence of the expan-
sion of state power. The newly empowered ‘General Directorate of Social Assistance and Solidarity
(SYDGM)’ manages an ever-increasing budget for social assistance, the number of mean-tested
health insurance (Green Card) holders explodes, health care expenditures rise substantially, and
municipalities become important liaisons for channeling private money and donations for anti-
poverty purposes. The cumulative effect is an ‘institutional welfare-mix’ that has actually mutated
so as to compensate for the absence of the earlier, politically attractive but fiscally unsustainable
welfare conduits. The result has so far been the creation of immense room for political patronage,
the expansion of state power, and no significant improvement of welfare governance.
Keywords
Turkey; welfare reforms; patronage
Agricultural subsidies in this country should actually be seen as unemployment insurance.

You cannot and should not get rid of them overnight.
—Süleyman Demirel, seven-time prime minister and president in Turkey,

in an interview in August 17, 2002 Finansal Forum
1)
I would like to thank Yale University, Council of Middle East Studies and the editors of this
special issue for their support and feedback during the writing of this article.
© Koninklijke Brill NV, Leiden, 2010 DOI 10.1163/187633710X500739
0001165337,INDD_PG1681 152 4/13/2010 2:19:32 PM

M.Eder / Middle East Law and Governance 2 (2010) 152–184 153
Debates on globalization have long focused on the question of retreat or sur-

vival of states in the midst of growing international competition. Whether the
governments can sustain their earlier welfare commitments or whether they
will have to decrease their social expenditures while privatizing (and/or sub-
contracting) public social services has become the primary testing ground for
such debates. Among the students of comparative political economy, this
debate took the form of whether there is a growing institutional convergence,
i.e. growing ‘similarity in structures, rules, procedures and processes’2 towards
a limited, ‘minimalist’ ‘liberal’ welfare state, or whether there are still lingering
divergent welfare states based on political and economic compromises and
institutional legacies.3
That there is significant variety in terms of responses, institutional forms,
and the political context within which these welfare states are changing is
clearly not surprising. In fact, almost the entire literature on the development
of welfare state and Esping-Anderson’s now classic work on Three Worlds of
Welfare Capitalism (1990) and later his Social Foundations of Post-Industrial
Economies (1999) are based on analyzing the differences between how the
states, markets and households created different patterns of social provision in
different countries and produced very different welfare outcomes. Anderson’s
typology, for instance, was primarily based on income maintenance and labor
market practices and focuses on the degree to which labor is de-commodified,
i.e., is protected from the market forces. The political settlement between
labor, capital and state since WWII, he argued, has created different institu-
tional legacies and outcomes. It is precisely these institutional legacies and the
early political compromises that are then likely to shape the degree of retrench-
ment and reform of the welfare states, accounting for different welfare
trajectories.
Surprisingly, however, very little of these debates on the changing role of the
state and ‘varieties of welfare states’ has spilled over to the discussions on wel-
fare reforms in the developing countries.4 This may largely be thanks to the
2)
C. Kerr, The Future of Industrial Societies: Convergence or Continuing Diversity (Cambridge:
Harvard University Press, 1983), 3.
3)
Esping-Anderson, Social Foundations of Post-Industrial Economies (Oxford: Oxford University
Press, 1999); P. Hall and D. Soskice, Varieties of Capitalism (Oxford: Oxford University Press,
2001); E. Huber and J. Stephens, Development and the Crisis of Welfare State (Chicago: Chicago
University Press, 2001); H. Kitschelt et al., Continuity and Change in Contemporary Capitalism
(Cambridge: Cambridge University Press, 1999).
4)
E. Huber, ed., Models of Capitalism: Lessons for Latin America (Philadelphia: Pennsylvania
University Press, 2002); E. Kapstein and B. Milanovic, When Markets Fail: Social Policy and
0001165337,INDD_PG1681 153 4/13/2010 2:19:33 PM

154 M.Eder / Middle East Law and Governance 2 (2010) 152–184
significant differences between the ‘mature’ welfare states and the developing
countries. Four common features in the developing countries make such an
application difficult. First, the concepts of ‘welfare state’ and ‘social policy’
privilege the state in terms of social provision. In most of the developing coun-
tries, the welfare states and government-led social policy framework are either
not developed or its coverage is too limited. There are other actors such as the
family, community groups, NGOs, and private initiatives that have actively
participated in social provision. Thus following Gough5 using the term welfare
regime, as ‘a more generic term referring to the entire set of institutional
arrangements, policies and practices affecting the welfare outcomes and strati-
fication effects in diverse social and cultural contexts’ can be more useful,
acknowledging the wide-variety of institutional ‘welfare-mix’.
Second, and perhaps most importantly, Anderson’s typology assumes a ‘rela-
tively autonomous state’ with a structural power, capable to respond to various
class interests and social demands. This image of clearly defined state-society
boundaries is also hardly applicable to the developing countries where the
state is often extremely ‘permeable’.6 For example, either international pres-
sures (mostly via the World Bank and the IMF) are visible and/or domestic
clientelistic and particularistic interests often overshadow the pursuit of long-
term public interests.
Third, using the concept of de-commodification of labor, is highly problem-
atic in countries where the informal labor market are vast and that social,
informal networks operate very differently than the contractual, impersonal
labor markets. This extensive informal market suggests that labor is not
fully commodified to begin with. The significant percentages of rural popula-
tion with subsistence agriculture and the abundance of non-wage labor (share-
cropping, peasant agriculture, family labor, outworking, subcontracting etc.)
Economic Reform (New York: Russell Sage Foundation, 2002); S. Haggard and R. Kaufmann,
eds., Development, Democracy and Welfare States: Latin America, East Asia and Eastern Europe
(Princeton: Princeton University Press, 2008); N. Rudra, ‘Globalization and the Decline of the
Welfare State in Less-Developed Countries,’ International Organization 56.2 (2002): 411-445;
N. Rudra, ‘Welfare States in Developing Countries: Unique or Universal?’ The Journal of Politics
69.2 (2007): 378-396; I. Gough and G. Wood, eds., Insecurity and Welfare Regimes in Asia, Africa
and Latin America: Social Policy in Development (London: Cambridge University Press, 2004).
5)
I. Gough, ‘Welfare Regimes in Development Contexts: A Global and Regional Analysis,’ in
Insecurity and Welfare Regimes in Asia, Africa and Latin America: Social Policy in Development, eds.
Gough and Wood (London: Cambridge University Press, 2004), 26.
6)
Ibid. (Gough and Wood).
0001165337,INDD_PG1681 154 4/13/2010 2:19:33 PM

also make the use of the de-commodification concept difficult. Equally impor-
tant is the very different roles women assume in most of the developing coun-
tries in and outside the family, which is completely neglected in this framework.
Women play the most crucial part in welfare provision across the developing
world, particularly when it comes to children and elderly care.
Finally, the political mobilization can also take very different forms; hence
the politics of welfare regime change is also likely to be quite different in the
developing country contexts. Class power or various economic interest groups
may not necessarily be the most important agents of political mobilization.
Ethnicity, religion, caste, kinship or other interpersonal networks may actually
capture the political landscape more effectively thus complicating our under-
standing as to why and how such shifts in welfare regimes occurs in these
countries. Going back to the state-society relations, the legacies of the earlier
welfare regime and the political compromises associated with the earlier wel-
fare regimes along with economic push factors can provide better insights on
the nature and direction of welfare reform.
Focusing on the political economy of welfare regime change in Turkey,
which started slowly in the 1980s but accelerated in the aftermath of the
2000/2001 financial crises in the country, this article uses the Turkish case
to highlight some of the problems associated with the assumption of ‘capable,’
and ‘autonomous’ states undertaking reforms. The examples from mature
welfare states can still be insightful, however, as the nature of welfare regime
change will depend on the legacies of prior welfare regimes as well as on the
political opportunity structure it creates for the governments. That is why
characterisation of the welfare regime change in Turkey as a convergence
towards a neoliberal paradigm with the retreat of the state, or as a com-
pletely divergent case of new welfare etatisme, too unique to be compared to
other countries, can be highly problematic.7 Despite the seeming retreat of
the state from welfare provision and privatization of some of these social ser-
vices, there is a growing diffusion, de-centralization, political expansion and,
7)
There is a tremendous variety in the language here. Jessop talks about transformation from
welfare to workfare state, Phil Cerny, talks about ‘competition state,’ Susan Strange discusses the
‘retreat of the state,’ more recently Rudra uses cluster analysis for classifying ‘productive’ welfare
states in LDCs, promoting market reforms and ‘protective’ welfare state protecting select indi-
viduals from the market and a dual welfare state which manifest both trends. See P. Cerny,
‘Paradoxes of the Competition State: The Dynamics of Political Globalization,’ Government and
Opposition 32.2 (1997): 251-274; S. Strange, Retreat of the State: Diffusion of Power in World
Economy (Cambridge: Cambridge University Press, 1996); Rudra, 2007 (see note 4).
0001165337,INDD_PG1681 155 4/13/2010 2:19:33 PM

perhaps paradoxically, ‘continual formation of the state’.8 Indeed, as the state

starts subcontracting and privatizing some of its social services and transfers
some of the responsibilities to other actors—i.e. municipalities, foster parents,
private hospitals—and moves away from a ‘social state,’ towards what one can
call a ‘social assistance state,’ opportunities for political appropriation of
funds, the politicization of various distribution channels of social welfare
abound.
As discussed below, there is clear evidence for both retreat and extension of
state’s political power in the case of Turkey. The state does indeed retreat from
directly providing social services through either financing the private sector or
households to provide such services, (which may actually mean, at least in the
short run, increase in social expenditures) and/or transfer of these services to
private actors entirely, thereby presumably shifting to a ‘regulatory’ role. Yet,
there is also evidence that the state, in assuming an increasingly controlling
role, stretches its increasingly politicized power into various aspects of social
and economic life. As the social assistance funds and transfers in the country
skyrocket out of control, as the empowered municipalities work in private
partnerships to assume new responsibilities in social services, and as the NGOs
are empowered through legal changes to collect donations for the ‘causes’ of
their own choosing, this ‘social assistance state’ actually increases its political
power, adapting to changing demands. The reason the welfare regime change
in Turkey involves both the retreat of the state and the extension/politicization
of state power is a result of both the legacies of the old welfare regime, with the
economic push factors which made it unsustainable, and the political pull fac-
tors since governments, when given the opportunity, normally choose politi-
cally expedient ways to expand their political power.
Mapping Turkey’s Old ‘Indirect’ Welfare Regime
With more than half of its workforce employed in the informal sector (a stag-
gering 87 percent of those employed in the agricultural sector) almost
40 percent of its overall population does not have healthcare.9 Turkish gov-
ernments have long struggled with the challenges of addressing the social
8)
B. Hibou, ‘Domination and Control in Tunisia: Economic Levers for the Exercise of
Authoritarian Power,’ Review of African Political Economy 108 (2006): 185-206.
9)
All numbers are from TUIK unless otherwise indicated.
0001165337,INDD_PG1681 156 4/13/2010 2:19:33 PM

security needs of its rapidly growing population sharing many characteristics

of welfare regimes in the developing countries described above. Nevertheless,
the fact that abject poverty10 has been relatively small, even during the worst
of economic times (a little above 2 percent), suggests that despite its limita-
tions, Turkey’s institutional ‘welfare mix’ has not been a total disaster.
But Turkey’s limitations of the social policy framework were all but evi-
dent from the very start. Simply put, the formal social policy in Turkey has
long been based on the provision of free primary, secondary and tertiary edu-
cation, coupled with public health care and a pension system which were all
linked to the employment status. Founded in 1949, Retirement Chest has
provided health care and pension for civil servants, and Social Insurance
Institution, founded in 1946, covered the workers. The self-employed were
covered by Bagkur, which was founded in 1971. (Table 1 shows the number
of people covered in each insurance scheme.) As the table indicates, nearly half
of the working population are still not covered by any of these insurance
schemes, working entirely informally in the labor market. High dependency
ratios also indicate a strikingly low employment rate in the country. Between
1980 and 2004, the working age population grew by 23 million, but only
6 million jobs were created. The result is a 44 percent employment ratio,
which is among the lowest in the world. Another striking feature, and one of
the fundamental reasons of low employment rates in the country, is the female
participation rate. The female employment rate has been declining since
the 1960s and has hovered around 20 percent, half that of its European
counterparts.11
It is not surprising then that a low employment ratio coupled with a high
degree of informality in the labor markets has really widened the gap between
those employed formally and those employed in the informal sector. Those
with insurance premiums paid by the employer (until the 2007 social security
reform, the Turkish state did not contribute at all to the insurance schemes)
and those who have neither coverage nor access to basic health care. What is
striking is the contrast between the privileged and easily accessible services and
protection for the working population and the absence of any alternatives for
the rest. The numbers are particularly striking in the rural sector where, on
10)
Defined as under one dollar a day according to UNDP.
11)
World Bank, Labor Market Study: Summary Turkey World Bank Document (Turkey: World
Bank, April 14, 2006), 4-7, http://siteresources.worldbank.org/INTTURKEY/Resources/
361616-1144320150009/Ozet-Overview.pdf.
0001165337,INDD_PG1681 157 4/13/2010 2:19:33 PM

Table 1. Population covered by social insurance programs (1998-2005)

SSK Emekli Sandığı Bağkur
Workers Retirement Self-

Chest of Employed
Civil Servants
1998 5,323,434 2,071,867 1,911,259

1999 5,030,732 2,118,085 1,939,593
Number of active 2000 5,283,234 2,156,176 2,181,586
members 2001 4,913,939 2,236,050 2,198,200
2002 5,256,741 2,372,777 2,192,555
2003 5,655,647 2,408,148 2,224,247
2004 6,229,169 2,404,091 2,212,299
2005 6,965,937 2,402,409 2,103,651
Membership Coverage in total 1998 24,4 9,51 8,77
Figures employment (%) 1999 22,81 9,6 8,79
2000 24,48 9,99 10,1
2001 22,8 10,38 10,21
2002 24,61 11,11 10,26
2003 26,74 11,38 10,51
2004 28,58 11,03 10,15
2005 31,59 10,89 9,54
Number of 1998 23,095,667 4,548,789 9,206,911
dependants 1999 21,469,875 4,635,514 9,655,546
2000 22,541,181 4,777,090 10,446,180
2001 21,592,466 4,980,651 10,601,159
2002 22,993,730 5,255,878 10,832,989
2003 24,610,697 5,363,274 11,051,955
2004 26,771,763 5,331,249 11,266,245
2005 29,447,871 5,272,130 11,035,587
Dependency ratios 1998 4,33 2,19 4,81
1999 4,26 2,18 4,97
2000 4,26 2,21 4,79
2001 4,39 2,22 4,82
2002 4,37 2,21 4,94
2003 4,35 2,22 4,96
2004 4,29 2,21 5,09
2005 4,22 2,19 5,24
Source: SPO.
average, the lack of any social insurance has systematically been around
85 percent of the agricultural labor force. In the case of women who are
counted as ‘employed in family farms as unpaid family workers,’ nearly 100
0001165337,INDD_PG1681 158 4/13/2010 2:19:33 PM

percent do not have any insurance.12 Given the fact that until very recently,
rural employment still counted for 40 percent of total employment the con-
trast becomes even greater.
Welfare provision and social policy framework in Turkey have also been
based on informal strategies, implicit social pacts, compromises and most
importantly family ties and informal personal networks. Unlike its Latin
American and South European counterparts, Turkey has not developed well-
funded social assistance programs to address these economically vulnerable
sectors. Instead, Turkey used: (a) extensive agricultural subsidies along with
tax exemption of the rural sector; (b) the possibilities of informal housing in
the urban areas where the public land could easily be invaded by irregular set-
tlers, and, as is common with most of the developing world, and; (c) extensive
private family and social networks. These three factors have long been the
foundation of the country’s welfare regime and have largely been responsible
for the relative absence of violent dispossession, extreme poverty, rapid
commodification and/or social unrest. Both the agricultural subsidy programs
as well as the ‘deliberate negligence’ on informal urban housing provided
ample room for populism.13
a) Agriculture
Three main features of Turkey’s agriculture have been instrumental in main-

taining what can be called ‘indirect welfarism’ in Turkey. With the exception
of a brief period in the 1980s, product subsidies were persistently high until
2001, well above world prices. Combined with the habitual registration
of the non-performing farmers’ credits as ‘duty losses’ of the Ziraat Bankası,
(a national bank predominantly designed to provide credits and receive depos-
its from the farmers) it became one of the main characteristics held account-
able for the huge fiscal deficits in the country since the 1960s. Non-existing,
or extremely low levels of taxation from agriculture and production based on
small land ownership comprise the other two unique characteristics of Turkey.
About 60 percent of the rural families own less than five hectares of land and
12)
As these women migrate to the cities, they will be recorded as unemployed which explains the
further decline in female labor participation as rural employment numbers decrease particularly
since 2000.
13)
A. Bugra and C. Keyder, New Poverty and Changing Welfare Regime in Turkey, United Nations
Development Programme report, 2003; A. Bugra and C. Keyder, ‘The Turkish Welfare Regime
in Transformation,’ Journal of European Social Policy 16 (2006): 211-228.
0001165337,INDD_PG1681 159 4/13/2010 2:19:33 PM

another 20 percent between five and ten hectares.14 Mostly because of the
availability of land, and thanks to policies and concerns dating back to the
Ottoman era (large landowners were always perceived as threats to the central
government), small landownership has persisted until now; Kurdish southeast
regions and a few valleys in Söke and Çukurova are the only exceptions.
The small peasantry and agriculture which persisted in Turkey’s economy
until the 1980s actually dates back to the early republican political compro-
mise, wherein the new single-party government eliminated the agricultural
tithe (aşar) in 1925. As a strategy to address the intense rural poverty that
plagued the countryside, it meant to ensure peasants’ loyalty to the new repub-
lic. Several attempts to place taxes on agriculture have failed since then, as
there were ongoing political concerns of social unrest, mass migration, massive
dispossession and arguably a social explosion. More importantly, however, the
persistence of a large rural population, thanks to small landownership, also
meant that agricultural policies and subsidies became prime areas of political
and populist contestation. So much so, that the politicians since the 1950s
have consistently found themselves in a populist competition, outbidding
each other in terms of agricultural base prices (prices at which the government
guarantees to buy from the farmers).15
Not surprisingly, the product subsidy equivalents (PSEs) have been consis-
tently high in Turkey. 86 percent of the PSE has emerged from price support
and 14 percent from import subsidies. Kasnakoğlu has calculated that until
1998,Turkey’s producer support reached an annual $2500 farming household
and $500 per farming person. For full-time farmers, this number reached as
high as $1000 which corresponds to half of the per capita rural income.16 The
ratio of total agricultural transfers to the GDP has been consistently higher
than the OECD average. (Average 8 percent, for instance in 1997-99 period
as opposed to OECD average of 1.3 during the same period).17
14)
H. Kasnakoglu, ‘The Impact of Agricultural Adjustment Programs on Agricultural
Development and Performance in Turkey,’ FAO (June 2004), Ankara; M. Eder, ‘Political
Economy of Agricultural Liberalization in Turkey,’ in La Turquie et le developpement, ed. A. İnsel
(Paris: L’harmattan, 2002), 211-244.
15)
M. Eder, ‘Populism as a Barrier to Integration with the EU: Rethinking the Copenhagen
Criteria,’ in Turkey’s Europe: An Internal Perspective On EU-Turkey Relations, eds. Mehmet Uğur
and Nergis Canefe (New York: Routledge, 2004), 49-74.
16)
H. Kasnakoğlu and E. Çakmak, Tarım Politikalarında yeni denge arayışları ve Türkiye (Istanbul:
TUSIAD Publications, 1996), 61.
17)
OECD, Agricultural Policies in OECD Countries: Monitoring and Evaluation 2000 (Paris:
OECD Publications, 2000), 245.
0001165337,INDD_PG1681 160 4/13/2010 2:19:33 PM

Nevertheless, despite high costs and the ample opportunities of a political

compromise based on successive governments foregoing their tax revenues,
spending huge sums on product subsidies created for political patronage, it is
clear that, as Suleyman Demirel has suggested, these policies have managed to
cushion the rural population from extreme forms of poverty, providing them
with some sort of unemployment insurance. The seven-time prime minister
entered the history books upon coining a famous political slogan. Addressing
the peasants in his election campaigns, the fundamental political constituency
of his party, he said: ‘Do not worry, I will always give you 5 Turkish liras more
that the other parties as the base price of your product.’18
b) Informal Housing
If agricultural policies aimed at keeping the peasants in the countryside, over-

looking or perhaps deliberately neglecting informal housing in the urban areas
has been the predominant strategy to ease the pressures of migration and inte-
gration to the cities. As in most of the irregular settlements in the developing
world, gecekondus (literally means landed-overnight in Turkish) was an out-
come of the inability of the governments to provide low income housing to
address the problem of rapid urban migration, which despite all the agricul-
tural strategies cited above, began to skyrocket in the 1960s. As Bugra reports,
‘In the first half of the 1960s, 59 percent of the population in Ankara,
45 percent in Istanbul and 33 percent in Izmir lived in irregular settlements.’19
18)
S. Pamuk, ‘Economic Change in Twentieth Century Turkey: Is the Glass More Than Half
Full?’ in Cambridge History of Modern Turkey, ed. Resat Kasaba (Cambridge: Cambridge
University Press, 2008), 294. As Pamuk summarizes:
Large productivity and income differences between agriculture and urban economy have
been an important feature of the Turkish economy since the 1920s. Most of the labor force
in agriculture is self-employed in the more than 3 million family farms, including a large
proportion of the poorest people in the country. The persistence of this pattern has not
been due to the low productivity alone, however. If the urban sector had been able to grow
at a more rapid pace more labor would have left the countryside during the last half cen-
tury. Equally important, governments have offered very little amounts of schooling to the
rural population in the past. Average amount of schooling of the total labor force (ages
fifteen to sixty-four) increased from only one year in 1950 to about seven years in 2005.
The average years of schooling of the rural labor force today is still below three years, how-
ever. In others words, most of the rural labor force today consists of undereducated men
and women, for whom the urban sector offers limited opportunities.
19)
Ayse Bugra, ‘Immoral Economy of Housing in Turkey,’ International Journal of Urban and
Regional Research 22 (1998): 307.
0001165337,INDD_PG1681 161 4/13/2010 2:19:33 PM

The peculiar aspect of gecekondus in Turkey, however, was the fact that they
were mostly built on available public land in the cities (75-80 percent).20 The
land was simply invaded and appropriated mostly by the new migrants into
the city.
This deliberate negligence of informal housing was again a result of a politi-
cal compromise. The governments could manage a possible urban social unrest
through informal housing and ease its burden of having to deal with the
immediate implications of migrations to the cities. Meanwhile, the new
migrants found a way, however immoral and unfair it may have been, to ease
their transition to the cities and experience what came to be classically dubbed
as ‘poverty-in turns’. Previous migrants moved to better, improved houses and
integrated into the city, leaving room for the new migrant poor.21 Once again,
however, such a political compromise created an enormous opportunity of
political patronage mechanisms, and clientelism, as land titles would most
likely be distributed prior to local elections.
A total of seven amnesty laws passed since the 1950s, regarding regularizing,
legitimizing and legalizing the gecekondus, and allowing them to receive equal
municipal services.22 The distribution of land titles in return for votes became
a typical political strategy. Moreover, gecekondus themselves eventually
became commercialized themselves.23 Through improving the physical condi-
tions of the buildings, disregarding aesthetics, and at times even turning them
into semi-cities (as Erder aptly demonstrated in the case of Ümraniye),24 these
buildings created additional income, rent opportunities and eventually addi-
tional income through sales to newcomers, most of whom would often be
their hemşeris (provincial brothers).
What the above picture on Turkey’s informal welfare regime implies is that
the states have often lacked the institutional capacity to provide a full-fledged
social services and quality welfare. However, populist policies at the macro
level along with over-reliance on family networks have compensated for some
of the in-egalitarian corporatist aspects of the regime, which over-privileged
20)
Ibid., 309.
21)
M. Pınarcıoglu and Oguz Işık, Nöbetleşe Yoksulluk: Gecekondulaşma ve Kent Yoksulları,
Sultanbeyli örneği: Rotating poverty: Slums and Urban Poverty (Istanbul: İletisim, 2001).
22)
I. Tekeli, Gecekondu maddesi Istanbul Ansiklopedisi (Istanbul: Tarih Vakfi, 1993).
23)
A. Öncü, ‘The Politics of the Urban Land Market in Turkey: 1950-1980,’ International
Journal of Urban and Regional Research 12 (1988): 38-64; Bugra, 1998 (see note 18).
24)
Sema Erder, Istanbul’a bir kent kondu: Ümraniye, (A city landed in Istanbul) (Istanbul: İletişim,
1996).
0001165337,INDD_PG1681 162 4/13/2010 2:19:33 PM

the workers but under-privileged the informal workers and the unemployed.
In her analysis of the reasons behind the dominance of the public sectors in
late-industrializing developing economies, Chaudhry argues that this domi-
nance was not due to the strength of the state but ironically thanks to its weak-
ness; an inability to create and regulate a market economy.25 A similar argument
can indeed be made within the context of the informal welfare regime in
Turkey as it reflects the lack of institutional capacity on the part of the state
and the need to resort to rather crude, populist, and ultimately costly, welfare
instruments.
Pressures for Change: Indirect Welfare Cushions under Strain
While most of the pillars of indirect welfarisms were seriously strained since
the 1980s, the social and economic impact of their collapse became all the
more visible since the 2000/2001 financial crises. Given their fiscal burden,
it is no surprise that agricultural policies became the main target of reform.
In fact, the implementation of agricultural reform implementation pro-
gram (ARIP), guided and supported by the World Bank, became a structural
benchmark for IMF lending in the aftermath of the financial crisis and this
accelerated changes in the agricultural production and the labor market.
Among its main changes ARIP envisioned was the elimination of product and
input subsidies, and a transition to direct income subsidy support for the
farmers.
One result has been the precipitous decline in agricultural employment.
The ratio of agricultural workers in total employment declines from 40 per-
cent in 1998 to 29.5 percent in 2005 and 27.3 percent in 2006,26 and an
estimated three million agricultural jobs have been lost since the financial
crisis of 2001.27 Furthermore, since the corresponding job growth in the urban
sectors was insufficient (in effect, Turkey went through the experience of
jobless growth along with many of the countries around the world), the pres-
sures of unemployment remained constant and high. All these developments
25)
Kiren Aziz Chaudhry, ‘The Myths of the Market and the Common History of Late
Developers,’ Politics and Society (September 1993): 245-274.
26)
Republic of Turkey Prime Ministry Undersecretariat of Treasury, www.treasury.gov.tr.
27)
B. Karapınar, ‘Rural Transformation in Turkey 1980-2004: Case Studies from Three Regions,’
International Journal of Agricultural Resources, Governance and Ecology 6, no. 4/5 (2007):
483-513.
0001165337,INDD_PG1681 163 4/13/2010 2:19:33 PM

essentially meant that informal welfare mechanisms through agricultural poli-

cies would no longer be available, which is also visible in the persistently high
degree of poverty in agriculture in comparison to the other sectors. Ratio of
poor individuals among the employed members (fifteen years old and above)
in agriculture were 33 percent in 2006, but 10 percent among those employed
in the industry and 7 percent employed in services.
Meanwhile, the prospect of using informal housing as a welfare measure
had long started dimming as urban landscape started becoming rapidly
saturated and commodified.28 Two major trends accelerated this process and
transformed the urban land into an area of social and political contestation.
One was the increasing devolution of power to the municipalities. In 1984,
the Motherland Party who enjoyed the parliamentary majority passed a
Construction law enabling the municipalities to prepare and approve urban
construction and land development. Needless to say, this change opened a
flurry of rent seeking activities, allowing the municipalities to subcontract
giant urban development and construction projects, as well as residential com-
plexes to the private sector. As urban real estate became a highly valuable com-
modity, and fully privatized, the so-called regularization of irregular settlements
had turned into the expansion of the city limits. Middle and upper middle class
suburban houses were often built with dire environmental consequences.29
Globalization and influx of foreign capital into the cities, which once again
increased the prospects for rent seeking for the municipalities, also fastened
this process of appropriation of land.30
Thus it is not surprising that despite ongoing controversies on measuring
and assessing poverty, there is a general consensus that the risk of poverty,
particularly in the aftermath of the financial crisis, has been on the rise in the
country. More than one million jobs were lost and many small businesses went
bankrupt. In 2008, the OECD report highlighted Turkey with the highest
rate of increase in child poverty and urgently called for a targeted poverty
28)
C. Keyder, ‘Globalization and Social Exclusion in Istanbul,’ International Journal of Urban
and Regional Research 29, no. 1 (2005): 124-134; C. Keyder, ‘Transformations in Urban Structure
and the Environment in Istanbul,’ in Environmentalism in Turkey: Between Democracy and
Development?, eds. F. Adaman and M. Arsel (Aldershot: Ashgate, 2005), 201-215.
29)
Bugra, 1998, 312 (see note 18).
30)
Keyder describes the physical transformation of Istanbul a la globalization: gated communi-
ties, five-star hotels, city packaged as consumption artifact for tourists, new office towers, expul-
sion of small business from central districts, beginnings of gentrification in old neighborhoods
and world images on billboards and shop windows. Keyder, ‘Globalization and Social Exclusion
in Istanbul,’ 128 (see note 26).
0001165337,INDD_PG1681 164 4/13/2010 2:19:33 PM

alleviation program. According to 2003 Euro stat data, the percentage of

children in Turkey under the age of sixteen with poverty risk was 34 percent,
twice the EU-25 average.
In a 2004 urban household survey, when asked their last six month’s average
family income, including the wages, pensions and rental income of all the
family members, 51.6 percent of households indicated that their income was
below 600 dollars/month. While one third of households reported income
levels between 600-1200 dollars, only 13.3 percent reported income higher
than 1,200 dollars. Based on these declared incomes, those who have a per
capita household income of approximately 2.5 dollars a day or less (approxi-
mately 100 YTL) can be considered economically vulnerable. Though most
economic vulnerability indexes are based on consumption and the cost of
basic and non-basic goods, we used income numbers, but with a much lower
threshold, as individuals are very likely to understate their income. Based on
the threshold of 100 YTL and less declared income, we found that 24 percent
of households had a per capita household income of 100 YTL, which is com-
parable to TUIK numbers.31
Ownership patterns reflect a very similar picture in terms of degree of eco-
nomic vulnerability and poverty. 76.2 percent in our survey did not have a car
in the household, and approximately 40 percent of the urban households do
not own their houses. These findings are also in line with ‘risk of-poverty’
rates, defined as 60 percent of median of the equalized net income of all house-
holds. In 2003, 26 percent of the Turkish population was below this line.
More striking is the high rate observed among the working population, which
amounts to 23 percent, implying that approximately one in five individuals
(among those who are employed) is a ‘working poor’. This number is threefold
the EU-25 average.32
These numbers suggest that Turkey is facing a serious welfare challenge.
Indirect welfare tools, which have enabled the governments to ‘supplement’
the earlier insufficient—albeit inegalitarian—welfare regimes, are no longer
available. The change in welfare regime in Turkey can indeed partially be
explained by this economic push and the growing severity of poverty and
social/economic vulnerability in the country. But the nature of welfare regime
31)
A. Carkoglu and M. Eder, ‘Urban Informality and Economic Vulnerability: The Case of
Turkey,’ unpublished paper (2006).
32)
F. Adaman and C. Keyder, ‘Poverty and Social Exclusion in the Slum Areas of Large Cities in
Turkey,’ research report prepared for the European Commission, Employment, Social Affairs
and Equal Opportunities (2006), 16.
0001165337,INDD_PG1681 165 4/13/2010 2:19:33 PM

change, is also path-dependent on prior institutional configurations.33 Since

the earlier welfare regime in Turkey allowed for political opportunities in the
form of agricultural subsidies and informal housing, an important question is
raised. How can the welfare regime change without losing political opportuni-
ties? And yet, welfare regime change in Turkey did occur without reducing, if
not expanding, the political power of the state.
Changing Welfare governance: Retreat or Expansion of State Power?
With their predominantly informal economies and immature welfare states,

increasingly incapable of responding to the rising demands for social services,
it is clear developing country welfare regimes diverge significantly from the
experience of mature welfare states. Turkey’s indirect welfarism described
above, based on populist agrarian subsidy programs, and endorsement/ negli-
gence of informal housing as well as over-reliance on family ties, offer just one
example of the wide variety of institutional ‘imperfect welfare mix’ in the
developing world. Further complicating the picture is the fact that the
components of this ‘welfare mix’ are in constant strain, some of the state-based
populist instruments become no longer viable under neoliberal pressures,
some of the public welfare provisions become privatized, others are subcon-
tracted and further passed on to households. How do these welfare regime
changes occur and what does this change imply in terms of the role of the state
and changing political opportunity structures?
Table 2 provides a brief overview of the welfare regime change in Turkey.
The collapse of the indirect welfare mechanisms came at the worst possible
time, when the retrenchment of the welfare state in Turkey and the gradual
withdrawal of the state from basic welfare provisions, appeared to be in full
swing in the country. Indeed, welfare reform package (Law on Social Security
and General Health Insurance) in Turkey not only increased the eligibility
requirements and premium payments for entitlements, but also ushered in
pathways for eventual privatization of healthcare.34
Privatization of social security system and the retreat of the state from
welfare provision as a whole can take a variety of forms.35 It may involve:
33)
Haggard and Kaufmann (see note 4).
34)
The law passed the parliament in 2006 and was printed in the Official Gazette on 31 May
2006, No. 5510 but was implemented in October 2008 after a series of modifications.
35)
Rudra, 2007 (see note 4).
0001165337,INDD_PG1681 166 4/13/2010 2:19:33 PM

Table 2. Overview of the welfare regime change in Turkey
0001165337,INDD_PG1681
Areas of social Organizational Changing eligibility PRIVATIZATION One PRIVATIZATION Two
policy restructuring requirements, access
Devolution of service Funding private actors to
provision to local admin., provide services or total
cooperation with private transfer of service provision,
sector, NGOs creating demand for private
services
Social insurance Unification of three Raising the retirement Allowing individuals to Encouraging FDI and
existing insurance age eventually to 65 buy private insurance private insurance
schemes, public for both men and and pension funds on development
contribution to the women, reduction in their own
social security system benefits
and premiums, PASG
system
Basic health care Unification and equal Universal health Encouraging private Payment to families for
access by all to all the insurance so as to hospitals and private taking care of elderly,
three health services replace Green card. pharmaceutical disabled and orphaned
associated with But except those with companies and private children, Public funding
insurance schemes, the monthly income insurance companies of private hospitals,
separate collection of of less than 1/3rd of (Basic Law on Health public funding of
social insurance and the minimum Care, 2005, land and pharmaceutical needs
M.Eder / Middle East Law and Governance 2 (2010) 152–184
(Continued)
167
167 4/13/2010 2:19:33 PM

0001165337,INDD_PG1681
Table 2. Overview of the welfare regime change in Turkey (Cont.,)
168
Areas of social Organizational Changing eligibility PRIVATIZATION One PRIVATIZATION Two

policy restructuring requirements, access
Devolution of service Funding private actors to
provision to local admin., provide services or total
cooperation with private transfer of service provision,
sector, NGOs creating demand for private
services
health premiums, very wage, everyone pays property of Treasury and

low state contribution, 12.5% premium, all MOH can be
marginal, SSK hospitals other coverage based transferred to corporate
merged with MOH on payment of /private bodies,
premium encouraging FDI in the
health sector
Education Free school books, Continuing with eight Encouraging private 100% Tax rebates for
increasing public year compulsory investment in education, private donors to
expenditure in education but highly public-private educations, private
education insufficient cooperation schools competing with
public schools.
Social assistance Skyrocketing of funds for Proof of poverty, NGOS, private sector Legal changes enabling
and anti- General Directorate of widows, women given involved, municipalities certain NGOS to collect
poverty Social Assistance and priority, arbitrary as ‘brokers of charity,’ donations,
M.Eder / Middle East Law and Governance 2 (2010) 152–184
Solidarity (SYDGM), definitions of the changes in municipality

elaborate but politicized poor law allowing them to
forms of social accept private donations
assistance
168 4/13/2010 2:19:33 PM

(a) application of management techniques often observed in the private sector

such as reduction in guaranteed benefits and budget constraints, in social ser-
vices; (b) measures aimed at increasing the role of the private sector in welfare
provision which may involve tax benefits, tax concessions to donations in edu-
cation and social service; (c) establishment of clear guidelines between fund-
ing and service delivery where the public funding is still used but service
delivery is contracted to NGOs, families or private actors and finally, and;
(d) devolution and decentralization of social services where the local govern-
ments cooperate closely with various private actor and donors and solve their
‘capital’ problems so as to provide certain social services. 36
These various aspects of privatization are at work within the context of wel-
fare regime change in Turkey. What is even more interesting, however, is that
despite these privatization trends, and withdrawal of the state from social ser-
vice provision, a full-fledged ‘retreat’ of the state is not all that visible. On the
contrary, not only has the share of public expenditures for social assistance,
education and health care in GDP increased across the board, but opportunities
for using/abusing state power has actually expanded in ways that were not
possible through the earlier populist welfare instruments.
a) Privatization Cut One
Social security reform agenda in Turkey once again emerged in the context of
fiscal constraints and debt sustainability. The deficit in the social security sys-
tem has risen as high as 6 percent of the GDP in 2006, becoming the primary
motive behind the reform. The ideas such as the financial autonomy of the
hospitals, the call for the Ministry of Health to shift from service provision to
regulatory role, and the need for the reforms to be fiscally sustainable were
identified as the primary goals in World Bank’s earlier 2004 Health Transition
Project (for which the Bank loaned 49.4 million Euros) eventually made their
way to the government’s ultimate social security reform agenda.37
The main controversies of the reform package focused on pension and
healthcare. One debate was over the increase in retirement age and the increase
36)
For the discussion of how these trends operate within the European context, see U. Ascoli
and C. Ranci, eds., Dilemmas of the Welfare Mix: The New Structure of Welfare in an Era of
Privatization (New York, Boston: Kluwer Academic/Plenum Publishers, 2002).
37)
WorldBank,http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/
IB/2007/06/12/000090341_20070612135757/Rendered/PDF/40018.pdf. The specific objec-
tives were to : (i) re-structure MOH for more effective stewardship and policy making; (ii)
0001165337,INDD_PG1681 169 4/13/2010 2:19:33 PM

in the minimum number of days for which premiums are to be paid before
retirement. Not surprisingly, the package received intense criticism from labor
unions and the general public. Increased premiums and caps on existing pen-
sion payments, as well as recalculation of some of the pension payments were
particularly unpopular.
Health care was also controversial. Under the reform package, all three social
insurance funds (SSK, Bagkur and Emekli Sandıgi, as well as their correspond-
ing hospitals), were institutionally united under the management of Social
Security Institution (SSI) and linked to the Ministry of Labour and Social
Security. The idea was to increase administrative efficiency and coordinate
between highly scattered funds. The unification of the social insurance organi-
zations and their hospitals was a positive development as it allowed everyone
to have equal access to the hospitals that have hitherto been exclusive to the
respective social insurance beneficiaries.
This did, however, raise questions about creating a giant bureaucracy. When
one considers the fact that social security deficits were also largely thanks to
the use and abuse of these funds for political purposes, the degree to which
such an institution can remain autonomous from political pressures remains
to be seen. Though streamlining the social security system under one bureau-
cracy can increase ‘efficiency,’ reduce the inegalitarian hierarchies in terms of
health and pension benefits among the various funds, and can even reduce
some of the double-counting embedded in the system, it is not all that clear
whether merging bureaucracies necessarily lead to ‘lean’ governments free
from political patronage.
Perhaps the most important aspect of the social security reform with regards
to the healthcare package was the fact that it essentially pushed for the spread
of supplementary private insurance schemes, bringing an array of arrange-
ments with private hospitals to open to the general public. With the
‘Transformation in Health Program,’ the government turned public hospitals
into autonomous business institutions that competed with private hospitals
and university hospitals. As such, SSI was the chief consumer buying and
financing public and private health service. Not surprisingly, private hospitals
quickly gained the upper hand in competition and their share in Social Security
establish a universal health insurance fund; (iii) introduce family medicine as the model for the
provision of primary health care services (iv) ensure financial and managerial autonomy for all
hospitals irrespective of ownership; and (v) set up a fully computerized health and social infor-
mation system.
0001165337,INDD_PG1681 170 4/13/2010 2:19:33 PM

health expenditures rose by 64 percent during 2002-2007 while that of state

hospitals fell by 33 percent.38 The number of private hospitals jumped from
269 to 365 in only two years, from 2005-2007.39
Many opposed such cooperation. The most vocal opposition came from the
Turkish Union of Medical Doctors, who interpreted such private-public coop-
eration as the creeping privatization of health care. Any observer of the coun-
try’s healthcare industry since the late 1990s would indeed confirm that the
private hospitals and clinics have been a booming business, and that interna-
tional insurance companies such as AIG and Allianz have flooded the market.
In fact, according to Central Bank records, foreign direct investment in health
and social work in Turkey has increased from 2 million dollars in 2002, to
35 million in 2004, and 265 million in 2006, another 177 million in 2007
and 149 million in 2008.40
If the aim of privatization of social services was to reduce the fiscal burden
of the state, however, it is clear that these trends have failed to achieve this aim.
If anything, the transfer of public funds to private agents has contributed to
the skyrocketing of public health expenditures. The public health care costs
have risen by 17 percent between 2002-2007 in fixed prices (a 200 percent
dollar increase).41
Altinok and Ucer42 argue that these rising health care costs might be thanks
to the shift from preventive care as is evident in the fall of expenditures for
people’s care, towards curative care which involves much greater consumption
of technology and medicine. As a result, medicine consumption rose by
100 percent (in Euros) between 2002 and 2007 making Turkey the country
with the highest medicine expenditures in the world as a share of the national
income. Foreign companies dominate the Turkish pharmaceutical industry
(70 percent) which suggests additional burden of current account deficits and
increases the need/dependence for foreign exchange.43
38)
Onur Hamzaoğlu and Cavit Işık Oğuz in ‘Packaging Neoliberalism: Neopopulism and the
Case of Justice and Development Party,’ Alper Yagci (MA Thesis, Department of Political Science
and International Relations, Bogazici University, Istanbul, 2009), 83.
39)
TC Sağlık Bakanlığı Tedavi Hizmetleri Genel Müdürlüğü in ibid., 11.
40)
TC Başbakanlık Müsteşarlığı Foreign Direct Investment in Turkey (Equity Capital) By
Sectors-Yearly, 2008 http://www.tcmb.gov.tr/yeni/eng.
41)
M. Altınok and A. R. and Üçer (2008), 1 www.tipkurumu.org/files/SagliktaDonusumSurecinde
SaglikHarcamalari-son.doc.
42)
Ibid.
43)
In a Sunday interview, Turkish Medical Association (TBB) ‘stated that holding the focus of
the debate on the figures of the medication consumption per capita was not healthy, and proved
0001165337,INDD_PG1681 171 4/13/2010 2:19:33 PM

Another example of privatization is found in the education of handicapped

children. In 2005, the government began giving financial assistance to
handicapped children so they might enroll in special education and rehabilita-
tion centers. Transfers for that purpose reached as high as TL 800 millions
earmarked for the year of 2009.44 Though, at first glance this step can be seen
as the state assuming responsibility for the education of handicapped children,
a closer analysis reveals that most of the handicapped children have since
enrolled in private special education centers, as the government has provided
financial aid to private institutions.
Privatization of care services, particularly for the disabled and the elderly is
yet another example. Historically, institutional care for the disabled and the
elderly has been under the responsibility of the Department of Social Services
and Protection of Children (SHÇEK). But in 2006, through a new statute,
SHCEK first allowed for private care, and through legal changes in 2007, the
government initiated a cash-transfer program for home-based disabled care.
Home-base care would then be funded through the minimum wage (approxi-
mately 300 dollars, minimum monthly wage). If home-base care was not
available, the state would have to pay the private rehabilitation center twice
the amount).45 The number of disabled people receiving home-based care
that Turkey would be the world leader if we took the ratio of the total pharmaceutical produc-
tion to the national income into account. According to the data of the TBB, the ratio of the
medication consumption to the national income in France, where the medication consumption
per capita is $391, is 1.15 percent. The ratio of the medication consumption to the national
income in Germany, where the medication consumption per capita is $308, is 0.95 percent. This
figure in Italy is $247 and the ratio is 0.82 percent, in England $250 and 0.7 percent, in Mexico,
$71 and 0.97 percent, whereas in Turkey the consumption is $93 and the ratio is 1.85 percent.
The TBB proves through these figures that Turkey is the world leader in terms of its ratio of its
medication consumption to its national income. Yagci, 2009 (see note 37).
Ali Rıza Üçer, the secretary general of the TBB, said that the increasing amount of Turkey’s medi-
cation consumption accordingly increased the dependence on imported medications. The national
pharmaceutical companies are devoured by the international monopolies and Turkey has been
reduced to a level where it is unable even to make its own vaccinations, he noted and added:
‘International companies control 70 percent of the market in Turkey. The deficit of medication
trade has exceeded $3 billion, and the ratio of the export’s ability to cover the import has dropped
to as low as 8 percent. The foreign trade deficit, increasing year by year, and our current account
deficit are to blame also in this huge trade gap that formed in the pharmaceutical commerce.’ See
Ercan Yavuz Ankara, ‘Turkey World Leader in Medication Consumption,’ Sunday Szaman, July
1, 2007, http://www.sundayszaman.com/sunday/detaylar.do?load=detay&link=1380.
44)
Yagci, 2009, 82 (see note 37).
45)
SHÇEK Genel Müdürlügğü (www.shcek.gov.tr).
0001165337,INDD_PG1681 172 4/13/2010 2:19:33 PM

increased dramatically from 56 in 2006 to 156,806 in 2009. However, as of

April 2009, a total cash transfer to base care of the disabled has already reached
8 percent of the total SHCEK budget. As Ilkkaracan notes, a similar law is
under way regarding the elderly care.46 The state will step in to provide insti-
tutional care ‘only if there is no other alternative,’ that is if the elderly has no
relative or is rejected by the family.
Finally, the project of 100 percent support for Education (Egitime %100
Destek) led by the Ministry of Education under the leadership of the Prime
Minister in 2005, stipulated that private donors to education would get a
100 percent tax rebate on their total donations. It is yet another example of
the readiness of the state to forego some of its tax revenue in return for sharing
the responsibility of education provision with private actors.47
Toward a ‘Social Assistance’ State and a New Form of ‘Welfare

Leviathan’?
One of the striking features of Turkey’s welfare regime, in stark contrast to its
Latin American and Southern European counterparts, has been the minor role
public social assistance programs have played in overall welfare provision. A
significant reason was the continued reliance on the family. Even the 1976
Legislation on Social Disability and Old Age Pension Funds, for instance,
defined eligibility only when there was ‘no close relative’ to take care of them.48
Partly because of the ‘indirect welfarism’ described above and the reliance on
family networks, ‘social expenditure categories such as survivors’ benefits,
incapacity, family support, active labor market policies, unemployment ben-
efits and housing is very low or almost non-existent in Turkey in comparative
terms, even in relation to Mexico and Korea. It constitutes 1.3 percent of the
GDP while the OECD average is 7.9 percent and comparable figures for
Mexico and Korea are 3.1 and 1.6 percent respectively.’49
Currently, General Directorate of Social Services and Child Protection is in
charge of all the central social assistance schemes in the country. The founding
46)
Pinar Ilkkaracan, ‘Rearticulating the Relationship between Family and the State in Neoliberal
Turkey: The Case of Care Services,’ unpublished paper (2009).
47)
Eğitime %100 Destek, http://www.egitimedestek.meb.gov.tr/haber.php.
48)
Bugra and Keyder, 2006, 222 (see note 13).
49)
Ayse Bugra and Sinem Adar, ‘Social Policy Change in Countries without Mature Welfare
State: The Case of Turkey,’ New Perspectives on Turkey 38 (2008): 96.
0001165337,INDD_PG1681 173 4/13/2010 2:19:33 PM

of the directorate itself in 1986 was, as Bugra and Keyder50 rightly argue ‘an
implicit admission that the family-based solidarity may no longer be suffi-
cient.’ But institutionally, the directorate was under-funded and insignificant
for many years. The important change came with the increasing use of the
‘Fund for Encouragement of Social Cooperation and Solidarity’ (Sosyal
Yardimlasma ve Dayanismayı Tesvik Fonu, SYDTF), which later became the
General Directorate of Social Assistance and Solidarity (SYDGM), an impor-
tant independent agency. While the fund had been previously administered by
a secretariat under the Prime Ministry, in 2004, the government founded an
independent Directorate General, and passed an associated law governing the
directorate. What was most remarkable about this institutional transforma-
tion was the degree of autonomy the directorate gained as it began drawing a
significant part of its resources from the extra-budget funds. With the excep-
tion of transfers to the Ministry of National Education and Ministry of Health
for social transfers, SYDGM and its Fund Board were beyond public scrutiny
and were only accountable to the Office of Prime Ministry.51
According to Law 25665, passed in 2004, and Law 25913 in 2005, the
Fund Board and SYDGM are expected to fund and supervise a total of 973
Social Aid and Solidarity Foundations (Sosyal Yardımlaşma ve Dayanışma
Vakıfları, SYDV) located at the city and provincial level that work in quasi
autonomy from each other as well as the Directorate General. These SYDVs
could also work very closely with local private partners and develop joint proj-
ects for targeted groups. While a small part of the fund is allocated for specific
purposes, education material for children, coal, project supports while the
majority is handed over as regular periodic transfers and left for the discretion
of SYDV. Combining these figures, we see that resources allocated by SYDTF
to the SYDVs rose steadily from TL 400 million in 2004 to TL 1.25 billion in
2008.52 In 2008, the money transferred to SYDV’s paid for food for 2.1 mil-
lion families, fuel for 2.3 million families, education materials for an estimated
2 million students, and helped 28 thousand families for rebuilding their shel-
ters.53 Among the most popular programs run by SYDGM is the conditional
50)
Bugra and Keyder, 2006, 222 (see note 13).
51)
V. Yılmaz and B. Y. Çakar, ‘Türkiye’de Merkezi Devlet zerinden Yürütülen Sosyal Yardımlar
Üzerine Bilgi Notu,’ Social Policy Forum, Boğaziçi University, July 2008, http://www.spf.boun
.edu.tr/docs/calisma%20notu_SYDGM-11.08.08.pdf.
52)
Ibid., 67.
53)
See Social Assistance and Solidarity Fund, http://www.sydgm.gov.tr/tr/html/236/Aile+
Yardimlari.
0001165337,INDD_PG1681 174 4/13/2010 2:19:33 PM

cash transfer to poor families to send their children to school. Yagci54 reports
that an estimated 2 million children saw their families receive cash, bringing
the total number of people—albeit with overlaps—to approximately 10 mil-
lion. Regardless of whether or not these assistance strategies work, to be able
to provide some sort of aid to a significant percentage of population and to
develop institutional mechanisms to ‘reach’ this many people indeed suggests
that the arguments for the ‘retreat’ of the state in the area of social assistance
are premature at best.
Despite its wide appeal, however, thanks to the discretionary nature of these
funds and the fact that they are coming primarily from extra-budget sources
beyond the scrutiny of parliament and/or international financial institutions,
the potential for patronage politics and the use of these funds for political
purposes has risen significantly. One major example was the fact that weeks
before the local elections prior to March 2009 the transfer of funds for social
purposes to the SYDV increased exponentially.55 In fact, there is a systematic
increase in total transfers starting in June 2008. Of the 2.345 billion TL that
was spent between February 2008 and 2009, approximately 800 million TL
was spent in the last three months prior to the local elections.56 The most
notorious case was when the pro-AKP governor of Tunceli saw that the local
SYDV distributed hundreds of washing machines and dishwashersin the prov-
ince, practically breaching the ban on election favors.57 Several ethnographic
studies currently underway suggest that, though definitely effective in target-
ing the poor, the degree of arbitrariness in defining the so-called ‘deserving
poor’ is considerably high among these foundations. Regardless of whether
the use of these funds for political purposes actually delivers politically, the
fact that the SYDVs could work so effectively on the ground and with such
discretionary powers, underscored the enormous potential for patronage and
politicization of the social policy framework in ways that was not possible
54)
Yagci, 2009, 83 (see note 37).
55)
According to news reports, 51 million TL has been transferred to local foundations just in
January of 2009, an amount roughly equivalent of the total social assistance budget spent during
the entire year of 2007. ‘Sosyal devlet secim oncesinde cosmos’ (Social state has gone off the roof
prior to elections), http://www.radikal.com.tr/Default.aspx?aType=RadikalDetay&ArticleID=
921498&Date=13.02.2009&CategoryID=77.
56)
Calculated from http://www.haberler.com/secim-oncesi-sosyal-yardim-ise-yaramadi-haberi/.
57)
Ferit Aslan et al., ‘Tunceli’de ‘Beyaz eşya’ yardiminda skandal,’ http://www.milliyet.com.tr/
Yasam/SonDakika.aspx?aType=SonDakika&ArticleID=1056770 (accessed on March 23, 2010).
Ironically, some of the villages of Tunceli where the washers were sent lacked roads and water to
use these machines to begin with!
0001165337,INDD_PG1681 175 4/13/2010 2:19:33 PM

before. Instead of using the rather crude and populist strategies of the earlier
era, the new institutional welfare mix and the growing importance of SYDVs,
allowed governments to extend their reach and fine-tune their political strate-
gies as they developed their ‘target population’.
Another major expansion of state power occurred in the so-called Green
Card program. Introduced in 1992, and albeit very mixed in its record and
quality of services, ‘The Green Card program’ is one of the very few mean-
tested social assistance programs. Giving access to hospitals and doctors
(though initially not medicine) to more than 12 million card holders who can
prove that they are in fact poor and in need of help as defined by law, it is
perhaps the most far-reaching as well.58 As in most social assistance schemes,
however, there were serious problems and concerns in the implementation of
the program based on arbitrariness of card distribution and subjective evalua-
tions of who constitutes the ‘deserving poor’. In some of the fieldwork that has
been done on this issue, for instance, a ‘deserving poor’ is defined as divorced,
orphaned, elderly and handicapped. A young man of working age is asked to
‘find work’ and ‘persuaded’ to find a micro credit and is hardly ever granted a
‘Green Card’.59 The emphasis on ‘work’ has not really disappeared. Similarly,
based on an ethnographic research in Southeastern city of Adiyaman, Yoltar
reports highly irregular and arbitrary distribution and implementation in the
Green Card program. Part of the problem is that, even though eligibility
requirements for a Green Card are specified by law, (those not covered by
public insurance schemes with incomes of one third of minimum wage),
establishment of income levels in highly informal labor markets has proved
very difficult. This uncertainty, has in turn, created enormous room for discre-
tion and interpretation of the laws by local officials fueling patronage net-
works and clientelism.60 Who gets to define the ‘deserving poor’ and how
58)
Bogazici Universitesi, Social Policy Forum.
59)
Ayse Bugra and Çağlar Keyder, ‘Kent Nufüsünün en yoksul kesiminin istihdam yapısı ve
geçinme yöntemleri’ (‘The employment structure and the survival strategies of the urban poor’)
(Unpublished TUBITAK report, 2008), 21.
60)
See ibid., 774. Yoltar describes the following episode to demonstrate the arbitrariness and the
dangers of this local discretion: During my first visit to Adıyaman in 2004, a co-administrator
from the Directorate of Health-Care shared with us a very peculiar story as to why they decided
to (arbitrarily) terminate the Green Cards issued for citizens of Alevite conviction. He told us
that at first Alevites were being granted Green Cards; but then ‘they started to convert to
Christianity’. Apparently when the upper level bureaucracy demanded a reduction in the
number of Green Cards in circulation, local Green Card officials chose to terminate the Green
Cards of certain Alevite individuals belonging to communities in several villages that were
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these Green Cards will be distributed then becomes easily politicized, extend-
ing the political power of the state.
According to Altinok and Ucer,61 Green Card expenditures have increased
18 fold since 2000, when 10 million people had them. This number increased
to 13 million in 2002, but dropped to 6.7 million in 2004 before increasing
once again in 2007 to 10.8 million and skyrocketing to 14.5 million prior to
2007 national elections. In 2008, however, it dropped again to 9.4 million,
due to the Green Card cancellations after the national elections. Once again,
the wide fluctuation in these numbers suggests that the distribution of these
Green Cards was indeed very politicized, and that there was ample room for
patronage politics. As part of the welfare reform package, the government also
proposed a universal health care scheme that would replace the Green Card,
The government would pay for health insurance for all those lacking insurance
and with income levels below one third of the minimum wage. It is highly
unlikely however that this new scheme, despite its mission of universal cover-
age, will be free from political influence.
Privatization Take Two: Other Actors in the ‘Welfare Mix,’

Municipalities as Charity Brokers, New Public-Private Cooperation
Schemes
What was also remarkable since 2003 was the increasing visibility of the
municipalities in the social assistance scheme. In 2005, with the laws concern-
ing provincial administration and greater municipalities, local municipalities
assumed greater responsibilities in social assistance. Metropolitan Municipality
Law (No. 5216), Provincial Special Administrations Law (No. 5302), Local
Administration Unions Law (No. 5355), Municipalities Law (No. 5393) were
subject to these rumors of conversion. Of course, according to the Green Card legislation, all
citizens—regardless of religious belief or ethnicity—who fit the Scheme’s poverty criteria would
be eligible for a Green Card. However, in the absence of legible guiding criteria, local officials are
free to take advantage of their abundant discretionary powers to make termination decisions
based on their own under- standings of who is a ‘fine’ citizen deserving of the state’s compassion.
The same co- administrator further shared with us that ‘we give these people Green Cards. But
then when they go and convert to Christianity, it is us who get into trouble. They ask us: why
did you give Green Cards to these people?’ This is an example of how the state delineates through
local practices the category of citizen and its margins.’
61)
Altınok and Üçer, 4 (see note 41).
0001165337,INDD_PG1681 177 4/13/2010 2:19:33 PM

among those passed since 2004. Candan and Kolluoğlu’s62 summary of the
effect of these laws provides a useful overview: ‘Municipality laws introduced
in 2004 and 2005…made the already influential office of the mayor even
more powerful. These new powers include: (1) broadening the physical space
under the control and jurisdiction of the greater municipality; (2) increasing
its power and authority in development (imar), control and coordination of
district municipalities; (3) making it easier for greater municipalities to estab-
lish, and/or create partnerships and collaborate with private companies;
(4) defining new responsibilities of the municipality in dealing with ‘natural
disasters;’ and (5) outlining the first legal framework for ‘urban transforma-
tion,’ by giving municipalities the authority to designate, plan and implement
‘urban transformation’ areas ‘and projects’.
Not surprisingly, the enhanced power of the municipalities created ample
room for patronage politics, as they were allowed to use private sector and/or
wealthy organizations for various services and funding. Municipalities have
thus become very visible by way of organizing soup kitchens for the poor,
building giant food tents for iftar meals during the month of Ramadan, and,
most importantly, in-kind assistance to the poor. Very little of the funding for
these services, however, actually comes directly from the municipalities, but
rather from those who contribute to the municipalities’ charity funds.
Clearly, such arrangements have created enormous welfare governance
problems. First, since the funding is dependent on charity, such programs
have been inconsistent and unreliable. Furthermore, given the fact that 30
percent of the public procurements were bid by the municipalities in 2007, it
would be naïve to think that charity would not become a substitute for brib-
ery, leaving ample room for corruption and political arbitration (Kamu Ihale
Kurumu (Public Procurement Office) 2007). A typical arrangement then
would be generous donations to the municipality charity fund in return for a
lucrative infrastructure and a real-estate bid.
Even more problematic is that there is growing evidence that such social
assistance schemes, particularly in the distribution of in-kind assistance such
as in coal and food, is increasingly being used for electoral gains. Once again,
this raises serious doubts on how the ‘deserving poor’ is defined. A most recent
ethnographic work in a municipality outside of Ankara, for instance, found
grave inconsistencies in the way social assistance programs are implemented,
62)
Ayfer Bartu Candan and B. Kolluoglu, ‘Emerging Spaces of Neoliberalism: A Gated Town
and a Public Project in Istanbul,’ New Perspectives on Turkey 39 (2008): 13-14.
0001165337,INDD_PG1681 178 4/13/2010 2:19:33 PM

finding them extremely subjective when it came to define who will get what
kind of assistance.63
It is important to point out that the government along with the municipali-
ties, have, in principle, supported such private initiatives and welcomed the
private sector involvement. Projects such as Project Rainbow, in which the
Ministry of Education and the General Directorate for the disabled jointly
appealed to philanthropic groups, for instance, aimed to finance the integra-
tion of the disabled into the labor markets. 100 percent tax rebates on the
donations of generous individuals to education and schools is yet another
example.64 There was also an enthusiastic support for applying the Grameen
Bank model which is based on providing micro-credits to poor women and
encouraging entrepreneurship, to poor women in Diyarbakir, a major city in
the Kurdish southeast. This was yet another sign that the government was still
convinced that poverty can be eradicated through private entrepreneurship
and work.65
The devolution of the central government’s role to the municipalities in
social assistance and the recruiting of private donors and private sectors for
these purposes suggest that the state is reproducing its power at the local level,
and using the ‘privileges’ of the state to ensure more private involvement. The
enabling of municipalities to engage in ‘social partnership’ not only solves the
‘capital’ problem for the state, but also allows the government to extend their
political power and sphere of influence by using private money.
NGOS and Charity Groups
Equally important is the meteoric rise in the number of charity associations,

philanthropic groups, NGOs, and community movements such as the Gülen
movement, which aim to fill the social vacuum left by the absence of a full-
fledged, mature welfare state. For instance, Deniz Feneri, an NGO known
for its Islamic tendencies, boasts of having collected millions of dollars in char-
ity, providing aid to thousands of poor children and the needy. In 2005, the
63)
R. E. Aydogan, ‘Deeper into Charity?: The Social Assistance Mechanisms in Turkey and the
Case of Greater Municipality of Ankara’ (MA Thesis, Bogazici University, Department of
Political Science and International Relations, 2009).
64)
Bugra and Adar (see note 47).
65)
Fikret Adaman and T. Bulut, ‘500 Milyonluk Umut Hikayeleri: Mikrokredi Maceraları’
(Hope stories of 500 million: Microcredit adventures) (Istanbul: İletişim, 2008).
0001165337,INDD_PG1681 179 4/13/2010 2:19:33 PM

organization was given the authority by the Council of Ministers, to collect

donations from the public without prior permission, reflecting the ease with
which the government has managed to subcontract social assistance to private
charities.66 The fact that the government enabled several NGOs to collect
donations without prior approval from the state, however, also highlights how
these NGOs are actually considered as new instruments of state’s political
power.
Other examples are the charity organizations and foundations linked to
Naksibendi tarikat and the Fetullah Gülen community, which are among the
richest Islamist communities. According to Rose Ebough and Koc,67 it is
estimated that some 500 big firms in wide range of sectors from finance to
textiles, more than 2000 schools, and seven universities in ninety countries,
TV channels, newspapers, magazines and one-hundred foundations are all
affiliated with the Gulen movement commanding more than 20 billion dol-
lars worth of an international empire.68 Among its many activities this com-
munity boasts of providing scholarships to bright kids, providing housing and
dormitories for thousands of students, and building solidarity networks among
small businesses. From the Lighthouses (Isikevleri) where the university stu-
dents stayed, studied and developed their ‘Muslim identity,’ to transnational
networks of schools with particular emphasis on creating a ‘modern Muslims’
(so called Golden Generation) the Gulen movement is particularly known for
its focus on education.69 In the absence of a social state delivering services,
providing sufficient dorms, high quality public education at all levels, these
organizations have filled the vacuum.
Two aspects of community-based philanthropic aspects are problematic,
however. For one, they tend to be non-transparent, which raises questions of
The German affiliation of Deniz Feneri has been charged and found guilty for corruption and
66)
embazzlement by the German courts. Similar charges have not yet been brought in Turkey. See
www.denizfeneri.org.
67)
Cited in Helen Rose Ebough and Dogan Koc, ‘Funding Gulen-Inspired Good Works:
Demonstrating and Generating Commitment to the Movement,’ 27 October 2007, http://
www.fethullahgulen.org/conference-papers/contributions-of-the-gulen-movement/2519
-funding-gulen-inspired-good-works-demonstrating-and-generating-commitment-to-the-
movement.html.
68)
Filiz Baskan, ‘The Political Economy of Islamic Finance in Turkey: The Role of Fethullah
Gulen and Asya Finans, in The Politics of Islamic Finance, eds. C. M. Henry and R. Wilson
(Edinburgh: Edinburgh University Press).
69)
Hakan Yavuz and John Esposito, eds., Turkish Islam and the Secular State: The Gülen Movement
(New York: Syracuse University Press, 2003).
0001165337,INDD_PG1681 180 4/13/2010 2:19:33 PM

accountability. (Why and how, for instance, are certain causes prioritized for
charity? How exactly are they administered?) Perhaps more importantly, how-
ever, is the familiar problem of conditionality being attached to getting access
to these services. As typical in any community organization, community affili-
ation and loyalty are expected in return for access.70 There is also growing
evidence that such communities can create new patterns and layers of social
exclusion.71 Such litmus tests in return for basic social assistance or social ser-
vices are simply incompatible with the notion of all-inclusive, universal
coverage.
At first glance, the increasing role of the NGOs in social assistance and
poverty alleviation can be seen as the retreat of the state, appearing to subcon-
tract some of these social provisions to the third sector. Such organizational
retreat, however, does not mean that the political power of the state is anyway
reduced. On the contrary, by enabling ‘certain’ NGOs to get involved and
collect private money and donations for various causes, the state also appears
to extend its political power through the NGOs. The extent to which this
move toward further philanthropy is in line with the Islamist, conservative
ideals of the government is beyond the scope of this article. What is clear,
however, is that through the legal changes that allowed some NGOs to assume
more responsibility in social assistance, the government has increased its polit-
ical reach and, in a way, has also genuinely compensated for its lack of insti-
tutional capacity to provide sufficient social assistance for the poor and
the needy.
Implications, Questions
Turkey is moving towards a new kind of institutional ‘welfare mix’. Whether

it is in the form of charity groups, philanthropic associations taking over some
state functions, or whether it takes the form of the state subcontracting its
welfare provision duties to the private sector, or the explosion of social assis-
tance programs often funded by extra-budget funds, away from the scrutiny
of the parliament and the international financial institutions, it is clear. As
described above, this institutional ‘welfare mix’ actually has a lot in common
70)
Who, for instance, gets to define the ‘modern Muslim’ or the eligibility criteria for some of
these resources?
71)
Binnaz Toprak, Din ve Muhafazarlık eskeninde ötekileştirme (Othering on the nexus of reli-
gion and conservatism), Bogazici University Fund and Open Society Institute, 2008.
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with the earlier forms of informal and populist welfare strategies in the coun-
try. Indeed, governments, concerned with their legitimacy and re-election
concerns try to continue their populist strategies albeit with fiscal constraints.
Some of the health-care reforms, such as the merging of the public hospitals,
free school books, the expansion of the Green Card and the targeted universal
health care coverage, can all be seen as politically rational and expedient
attempts to ease some of the social tensions, unemployment pressures, and
growing inequalities.
Two dimensions of the ‘welfare mix,’ however, appear rather new. One is the
increasing power of the governing elite. As the government develops bureau-
cratic agencies with extra-budget funds free from public scrutiny, as the gov-
ernment enables municipalities to cooperate with the private actors to provide
social assistance, as the government passes legal changes enabling some NGOs
to collect private donations, or as the government launches wide-spread cash
transfer programs for families, it actually increases its own political power, and
its own reach. In effect, the institutional diversification and pluralisation of
welfare provision in the country has not reduced the political power of the
state but helped to reproduce it in very different sites.
Secondly, though the potential for politicization of the welfare provision
was always there thanks to populist tendencies of various governments in
Turkey, the institutional discretion and flexibility within the ‘new’ welfare
regime, one can certainly argue, widens the scope and sharpens the govern-
ments’ ability to use specific social welfare provisions and vastly expand social
assistance programs for political purposes. Thus as the state retreats from some
of the social services, the simultaneous fine-tuning of the welfare regime and
incorporation of the private and third sector in welfare provision creates enor-
mous room for political arbitrage and clientelism.
This politicization can also explain why there has not been any significant
political opposition to these welfare reforms in the country despite its highly
controversial nature. As noted at the beginning, the political context within
which the welfare reforms occur in the developing countries tend to be rather
different, as there are fewer organized constituencies and/or economic groups
engaging in these debates. In the specific context of Turkey, the high popular-
ity of some of the reforms coupled with the absence of a successful past dealing
with welfare provision on the part of the opposition parties, has undermined
prospects for political debate.
Turkey’s experience with welfare reform suggests that privatization and
retreat of the state in terms of service provision can exist side by side with the
growing political reach and power of the state. In fact, the new ‘welfare mix,’
0001165337,INDD_PG1681 182 4/13/2010 2:19:33 PM

through providing flexibility to the local actors, enabling private-public part-

nerships, and encouraging NGOs, can provide more effective mechanisms—
albeit less transparent and less accountable—to expand the political reach of
the government than the simple transfer of public money.
The persisting legacy of patronage politics, informal welfare mechanisms,
and a continued blurring of the public and the private spheres regarding
healthcare and social assistance also pose serious policy dilemmas for the advo-
cates of economic liberalization, privatization and deregulation. If indeed, the
liberalization/privatization is not a panacea for better governance, but simply
a passage toward reproduction and expansion of state power and politicization
of social policy framework, then perhaps it may be time to envision alternative
institutional reforms and transparency/accountability mechanisms.
Meanwhile, there are indeed significant globalization pressures and fiscal
constraints that pressure both the mature and immature welfare regimes
towards significant reforms.72 To what extent these countries will converge
towards a minimalist, neoliberal welfare regime and how the role of the state
and other welfare institutions will change, however, remains highly uncertain.
What the Turkish case demonstrates is that there can be paradoxical and unin-
tended consequences to privatization and retreat of the state from welfare pro-
vision. As the state privatizes its welfare functions and services, it can
simultaneously increase its political power and reach, raising significant ques-
tions about the dichotomist discussions on the increasing or declining role of
the state.
The Turkish case also raises serious doubts on the ‘autonomous state’
assumptions prevalent in mature welfare state reform debates. It was precisely
the lack of capital and the lack of institutional capacity of the Turkish welfare
state in the first place that has created the ‘indirect’ welfare mechanisms to
begin with. Once such populist compromises were locked in, undoing them
was very difficult. Given the severity of the 2000/2001 financial crisis and the
pressures from IMF and the World Bank for fiscally sustainable and more
cost-effective welfare regime, however, a shift in welfare governance has become
inevitable. The nature and the content of this regime change, however, reflected
some of the same institutional weaknesses of the state: Changing the highly
unequal nature of the welfare regime is quite costly; the private actors and the
third sector are assuming increasing roles but are still heavily dependent on the
state; and social assistance mechanisms are still insufficient. More importantly,
72)
Haggard and Kaufmann (see note 4); Hall and Soskice (see note 3).
0001165337,INDD_PG1681 183 4/13/2010 2:19:33 PM

the regime change has left the politicization of social policy intact, as the
governments juggle the political need to meet the increasing welfare demands
and address the various political constituencies in the midst of fiscal con-
straints. As such, Turkey’s welfare state has never been autonomous, but heav-
ily influenced, either through external actors, and/or populism, informality,
and clientelism.
Whether the new welfare regime can address the growing economic and
social challenges in the country remains to be seen. It is safe to suggest, how-
ever, that the existing shift in welfare governance simply leaves too much room
for political patronage and clientelism, and introduces arbitrariness and highly
ambiguous litmus tests into the definition of the ‘deserving poor’. In a society
that already operates through informal networks and does not trust the state
in providing basic social services equally for all, such arrangements are likely
to undermine the trust in, and legitimacy of, the state institutions. Indeed, the
existing welfare transformation in Turkey may be on its way to change the very
basis of the state-citizen relationship. As citizens become needy subjects wait-
ing for handouts from the state or the voluntary donors, as they become will-
ing and ready to accept any litmus tests or community loyalty in order to
survive, the prospects for a transparent welfare governance based on rule of
law, equality and all encompassing state institutions might diminish. What is
worse, so far, neither the privatization nor the politicization of welfare provi-
sion have addressed the structural poverty and/or reduced the insecurity and
economic vulnerability in the country. If anything, with urban poverty becom-
ing increasingly permanent, rising unemployment, coupled with a clearly
unsustainable rate of health care expenditures and social spending, Turkey’s
‘welfare mix’ leaves much to be desired. And yes, agricultural subsidies in the
country as ‘unemployment insurance’ might be in decline, but for better or
worse, the institutional legacies of a politicized welfare regime, despite a
retreating state, is likely to last far longer than expected.
0001165337,INDD_PG1681 184 4/13/2010 2:19:33 PM
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Retreating State? Political Economy of Welfare Regime Change in Turkey

Article in Middle East Law and Governance · August 2010

Mine Sadiye Eder

The user has requested enhancement of the downloaded file.

Retreating State? Political Economy of Welfare Regime

Agricultural subsidies in this country should actually be seen as unemployment insurance.

—Süleyman Demirel, seven-time prime minister and president in Turkey,

© Koninklijke Brill NV, Leiden, 2010 DOI 10.1163/187633710X500739

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Debates on globalization have long focused on the question of retreat or sur-

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perhaps paradoxically, ‘continual formation of the state’.8 Indeed, as the state

Mapping Turkey’s Old ‘Indirect’ Welfare Regime

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security needs of its rapidly growing population sharing many characteristics

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Table 1. Population covered by social insurance programs (1998-2005)

Workers Retirement Self-

1998 5,323,434 2,071,867 1,911,259

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Three main features of Turkey’s agriculture have been instrumental in main-

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Nevertheless, despite high costs and the ample opportunities of a political

If agricultural policies aimed at keeping the peasants in the countryside, over-

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Pressures for Change: Indirect Welfare Cushions under Strain

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essentially meant that informal welfare mechanisms through agricultural poli-

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alleviation program. According to 2003 Euro stat data, the percentage of

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change, is also path-dependent on prior institutional configurations.33 Since

Changing Welfare governance: Retreat or Expansion of State Power?

With their predominantly informal economies and immature welfare states,

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167 4/13/2010 2:19:33 PM

Areas of social Organizational Changing eligibility PRIVATIZATION One PRIVATIZATION Two

health premiums, very wage, everyone pays property of Treasury and

Solidarity (SYDGM), definitions of the changes in municipality

168 4/13/2010 2:19:33 PM

(a) application of management techniques often observed in the private sector

a) Privatization Cut One

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health expenditures rose by 64 percent during 2002-2007 while that of state

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Another example of privatization is found in the education of handicapped

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increased dramatically from 56 in 2006 to 156,806 in 2009. However, as of

Toward a ‘Social Assistance’ State and a New Form of ‘Welfare

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Privatization Take Two: Other Actors in the ‘Welfare Mix,’

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NGOS and Charity Groups