Anatolian Tigers and the Emergence of the Devout Bourgeoisie in the Turkish Manufacturing Industry

Abstract

It has widely been asserted that an important dimension of social dynamics that eventually carried the Justice and Development Party (Adalet ve Kalkınma Partisi, AKP) to political power is the emergence of a “devout bourgeoisie” especially in the new growth centers of Anatolia. This chapter uses firm-level data since the 1980s to trace the economic and especially productivity dynamics in the manufacturing industries of new growth centers in Anatolia (“Anatolian Tigers”) in comparison to traditional growth centers (the “West”). It observes that what happened in the 1990s in the Tigers was a significant change in the size distribution of employment with the emergence of a significant number of medium-sized enterprises. In the late 2000s, there was a more visible convergence between labor productivity in the Tigers and the West and this convergence was more visible among large firms. The chapter examines the evolution of members of religious business associations among the largest 1000 manufacturing firms in Turkey, observing that the number of such firms increased substantially especially after the mid-1990s. These firms are export oriented, on average smaller than firms associated with business associations that represent the traditional industrial elite, and more concentrated in relatively labor-intensive industries that display lower productivity. The chapter argues that the evidence is broadly consistent with a story of increased inclusion and competition in manufacturing. It discusses the role of political connections and concludes that they possibly had a more diminished role in the emergence of devout businesses in manufacturing compared to rent-thick activities such as public procurement, construction, or regulated industries.