Business associations and foreign policy: revisiting state-business relations in Turkey

Abstract

Economic considerations are increasingly playing a role in defining Turkey’s foreign policy, and as a result, non-state actors from the economic realm like the business associations as the institutional representatives of the private sector are emerging as key actors in the formulation and implementation of policy. This study deals with the question of whether the increasing activism of business associations in foreign policy issues represents a transformation of state-business relations in Turkey from a state corporatist mode with clientelistic tendencies and patronage relations towards more formal, institutionalized and participatory forms such as liberal corporatism. In order to illuminate this issue, the experience of three business associations (Foreign Economic Relations Board of Turkey, Turkish Contractors’ Union, and Turkish Exporters’ Assembly) over the past three decades is analyzed by employing using a two-tiered principal-agent model, which positions the state as the principal and the business associations as the agents performing certain tasks on the state’s behalf and receiving incentives in return, within a historical institutional framework. The model has the dimensions of the interaction between the government and bureaucracy; the contract between the state and the business associations; autonomy of business associations; interaction between the administration and the constituency of business associations; and cooperation and competition between the business associations. Investigating the changes in these dimensions over time, this study discusses the development and limitations of state-business relations in Turkey. In this way, the study hopes to make a contribution to the literature on Turkish political economy and foreign policy.