Retreating State? Political Economy of Welfare Regime Change in Turkey

Middle East Law and Governance 2 (2009) 152–184

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

brill.nl/melg

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.

Retreating State? Political Economy of Welfare Regime Change in Turkey

Mine Eder Bo!azici University, Istanbul, Turkey 1

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 fi rst glance, Turkey’s welfare reform that emerged from the 2000-2001 fi scal crisis appears like a classic case of moving towards a minimalist, ‘neoliberal’ welfare regime—with increasingly privatized health care and private social insurance. ! e 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. ! e 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. ! e cumulative e" ect is an ‘institutional welfare-mix’ that has actually mutated so as to compensate for the absence of the earlier, politically attractive but fi scally unsustainable welfare conduits. ! e result has so far been the creation of immense room for political patronage, the expansion of state power, and no signifi cant 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

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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

! at there is signifi cant 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 " ree Worlds of Welfare Capitalism (1990) and later his Social Foundations of Post-Industrial Economies (1999) are based on analyzing the di" erences between how the states, markets and households created di" erent patterns of social provision in di" erent countries and produced very di" erent 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-commodifi ed, i.e., is protected from the market forces. ! e political settlement between labor, capital and state since WWII, he argued, has created di" erent 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 di" erent 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 ! is may largely be thanks to the

2) C. Kerr, " e 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


154 M.Eder / Middle East Law and Governance 2 (2010) 152–184

signifi cant di" erences between the ‘mature’ welfare states and the developing countries. Four common features in the developing countries make such an application di# cult. 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. ! ere are other actors such as the family, community groups, NGOs, and private initiatives that have actively participated in social provision. ! us following Gough 5 using the term welfare regime , as ‘a more generic term referring to the entire set of institutional arrangements, policies and practices a" ecting the welfare outcomes and strati-fi cation e" ects 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. ! is image of clearly defi ned 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.

! ird, using the concept of de-commodifi cation of labor, is highly problem-atic in countries where the informal labor market are vast and that social, informal networks operate very di" erently than the contractual, impersonal labor markets. ! is extensive informal market suggests that labor is not fully commodifi ed to begin with. ! e signifi cant percentages of rural pop ula-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?’ " e 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).



also make the use of the de-commodifi cation concept di# cult. Equally impor-tant is the very di" erent 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 di" erent forms; hence the politics of welfare regime change is also likely to be quite di" erent 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 e" ectively 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 fi nancial 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. ! e 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. ! at 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 di" usion, de-centralization, political expansion and,

7) ! ere 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: ! e Dynamics of Political Globalization,’ Government and Opposition 32.2 (1997): 251-274; S. Strange, Retreat of the State: Di# usion of Power in World Economy (Cambridge: Cambridge University Press, 1996); Rudra, 2007 (see note 4).



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. ! e state does indeed retreat from directly providing social services through either fi nancing 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. ! e 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.



security needs of its rapidly growing population sharing many characteristics of welfare regimes in the developing countries described above. Nevertheless, the fact that abject poverty 10 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. ! e 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. ! e 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. ! e 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. ! ose 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. ! e numbers are particularly striking in the rural sector where, on

10) Defi ned 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 .



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

SSK Emekli Sandı!ı Ba!kur

Workers Retirement Chest of Civil Servants

Self-Employed

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

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

Source: SPO.



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. ! ese 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 commodifi cation 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

! ree 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 fi scal defi cits 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 fi ve 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, ‘! e Turkish Welfare Regime in Transformation,’ Journal of European Social Policy 16 (2006): 211-228.



another 20 percent between fi ve 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.

! e 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 ( a$ar ) 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. Kasnako$lu 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 ! e 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, ‘! e 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. %nsel (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 U$ur and Nergis Canefe (New York: Routledge, 2004), 49-74. 16) H. Kasnako$lu and E. Çakmak, Tarım Politikalarında yeni denge arayı$ları ve Türkiye (Istanbul: TUSIAD Publications, 1996), 61. 17) OECD, Agricultural Policies in OECD Countries: Monitoring and Evaluation 2000 (Paris: OECD Publications, 2000), 245.


https://www.researchgate.net/publication/258375330_Agricultural_Policies_in_Non-OECD_Countries_Monitoring_and_Evaluation?el=1_x_8&enrichId=rgreq-65510cb2847071e826db5ae1c7708835-XXX&enrichSource=Y292ZXJQYWdlOzIzMzYwNTQ4MDtBUzoyMTU1NDAxNDE0MzI4NDFAMTQyODQwMDE4Mjk0Mg==

https://www.researchgate.net/publication/258375330_Agricultural_Policies_in_Non-OECD_Countries_Monitoring_and_Evaluation?el=1_x_8&enrichId=rgreq-65510cb2847071e826db5ae1c7708835-XXX&enrichSource=Y292ZXJQYWdlOzIzMzYwNTQ4MDtBUzoyMTU1NDAxNDE0MzI4NDFAMTQyODQwMDE4Mjk0Mg==


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. ! e 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 , gecekondu s (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 fi rst 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 ! an Half Full?’ in Cambridge History of Modern Turkey , ed. Resat Kasaba (Cambridge: Cambridge University Press, 2008), 294. As Pamuk summarizes:

Large productivity and income di" er ences 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. ! e 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 o" ered very little amounts of schooling to the rural population in the past. Average amount of schooling of the total labor force (ages fi fteen to sixty-four) increased from only one year in 1950 to about seven years in 2005. ! e 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 o" ers limited opportunities.

19) Ayse Bugra, ‘Immoral Economy of Housing in Turkey,’ International Journal of Urban and Regional Research 22 (1998): 307.



! e 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 ! e land was simply invaded and appropriated mostly by the new migrants into the city.

! is deliberate negligence of informal housing was again a result of a politi-cal compromise. ! e 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 ! e distribution of land titles in return for votes became a typical political strategy. Moreover, gecekondus themselves eventually became commercialized themselves. 23 ! rough 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 hem$eris (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-fl edged 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 I&ık, Nöbetle$e Yoksulluk: Gecekondula$ma ve Kent Yoksulları, Sultanbeyli örne!i : Rotating poverty: Slums and Urban Poverty (Istanbul: %letisim, 2001). 22) I. Tekeli, Gecekondu maddesi Istanbul Ansiklopedisi (Istanbul: Tarih Vakfi , 1993). 23) A. Öncü, ‘! e 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: %leti&im, 1996).



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 refl ects 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 fi nancial crises. Given their fi scal 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 fi nancial 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. ! e 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 fi nancial crisis of 2001. 27 Furthermore, since the corresponding job growth in the urban sectors was insu# cient (in e" ect, 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, ‘! e 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 ! ree Regions,’ International Journal of Agricultural Resources, Governance and Ecology 6, no. 4/5 (2007): 483-513.



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 (fi fteen 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 commodifi ed. 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 fl urry 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 infl ux 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

! us 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 fi nancial 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, fi ve-star hotels, city packaged as consumption artifact for tourists, new o# ce towers, expul-sion of small business from central districts, beginnings of gentrifi cation in old neighborhoods and world images on billboards and shop windows. Keyder, ‘Globalization and Social Exclusion in Istanbul,’ 128 (see note 26).



31) A. Carkoglu and M. Eder, ‘Urban Informality and Economic Vulnerability: ! e 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 A" airs and Equal Opportunities (2006), 16.

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. ! ough 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 refl ect 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. ! ese fi ndings are also in line with ‘risk of-poverty’ rates, defi ned 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 fi ve individuals (among those who are employed) is a ‘working poor’. ! is number is threefold the EU-25 average. 32

! ese numbers suggest that Turkey is facing a serious welfare challenge. Indirect welfare tools, which have enabled the governments to ‘supplement’ the earlier insu# cient—albeit inegalitarian—welfare regimes, are no longer available. ! e 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



33) Haggard and Kaufmann (see note 4). 34) ! e law passed the parliament in 2006 and was printed in the O# cial Gazette on 31 May 2006, No. 5510 but was implemented in October 2008 after a series of modifi cations. 35) Rudra, 2007 (see note 4).

change, is also path-dependent on prior institutional confi gurations. 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 signifi cantly 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, o" er 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. ! e 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:


M.Eder / Middle East Law and Governance 2 (2010) 152–184 167 Ta

ble 2

. O

verv

iew o

f the

welf

are r

egim

e cha

nge i

n Tu

rkey

Area

s of s

ocia

l po

licy

Org

aniz

atio

nal

rest

ruct

urin

gC

hang

ing

elig

ibili

ty

requ

irem

ents

, acc

ess

PRIV

ATIZ

ATIO

N O

nePR

IVAT

IZAT

ION

Tw

o

Dev

olut

ion

of se

rvic

e pr

ovis

ion

to lo

cal a

dmin

., co

oper

atio

n w

ith p

riva

te

sect

or, N

GO

s

Fund

ing

priv

ate

acto

rs to

pr

ovid

e se

rvic

es o

r tot

al

tran

sfer

of s

ervi

ce p

rovi

sion

, cr

eatin

g de

man

d fo

r pri

vate

se

rvic

es

Socia

l ins

uran

ceU

nifi c

atio

n of

thre

e ex

istin

g in

sura

nce

sche

mes

, pub

lic

cont

ribut

ion

to th

e so

cial s

ecur

ity sy

stem

an

d pr

emiu

ms,

PASG

sy

stem

Raisi

ng th

e ret

irem

ent

age e

vent

ually

to 6

5 fo

r bot

h m

en an

d wo

men

, red

uctio

n in

be

nefi t

s

Allo

wing

indi

vidu

als to

bu

y pr

ivat

e ins

uran

ce

and

pens

ion

fund

s on

their

own

Enco

urag

ing

FDI a

nd

priv

ate i

nsur

ance

de

velo

pmen

t

Basic

hea

lth ca

reU

nifi c

atio

n an

d eq

ual

acce

ss by

all t

o all

the

thre

e hea

lth se

rvice

s as

socia

ted

with

in

sura

nce s

chem

es,

sepa

rate

colle

ctio

n of

so

cial i

nsur

ance

and

Uni

versa

l hea

lth

insu

ranc

e so

as to

re

plac

e Gre

en ca

rd.

But e

xcep

t tho

se w

ith

the m

onth

ly in

com

e of

less

than

1/3

rd o

f th

e min

imum

Enco

urag

ing

priv

ate

hosp

itals

and

priv

ate

phar

mac

eutic

al co

mpa

nies

and

priv

ate

insu

ranc

e com

pani

es

(Bas

ic La

w on

Hea

lth

Car

e, 20

05, l

and

and

Paym

ent t

o fa

mili

es fo

r ta

king

care

of e

lder

ly,

disa

bled

and

orph

aned

ch

ildre

n, P

ublic

fund

ing

of p

rivat

e hos

pita

ls,

publ

ic fu

ndin

g of

ph

arm

aceu

tical

need

s

(Con

tinue

d)



he

alth

prem

ium

s, ve

ry

low

state

cont

ribut

ion,

m

argi

nal,

SSK

hos

pita

ls m

erge

d wi

th M

OH

wa

ge, e

very

one p

ays

12.5

% p

rem

ium

, all

othe

r cov

erag

e bas

ed

on p

aym

ent o

f pr

emiu

m

pr

oper

ty o

f Tre

asur

y an

d M

OH

can

be

trans

ferre

d to

corp

orat

e /p

rivat

e bod

ies,

enco

urag

ing

FDI i

n th

e he

alth

sect

orEd

ucat

ion

Free

scho

ol b

ooks

, in

crea

sing

publ

ic ex

pend

iture

in

educ

atio

n

Con

tinui

ng w

ith ei

ght

year

com

pulso

ry

educ

atio

n bu

t hig

hly

insu

# cie

nt

Enco

urag

ing

priv

ate

inve

stmen

t in

educ

atio

n,

publ

ic-pr

ivat

e co

oper

atio

n

100%

Tax

reba

tes f

or

priv

ate d

onor

s to

educ

atio

ns, p

rivat

e sc

hool

s com

petin

g wi

th

publ

ic sc

hool

s.So

cial a

ssista

nce

and

anti-

pove

rty

Skyr

ocke

ting

of fu

nds f

or

Gen

eral

Dire

ctor

ate o

f So

cial A

ssista

nce a

nd

Solid

arity

(SYD

GM

), ela

bora

te b

ut p

oliti

cized

fo

rms o

f soc

ial

assis

tanc

e

Proo

f of p

over

ty,

wido

ws, w

omen

giv

en

prio

rity,

arbi

trary

de

fi niti

ons o

f the

po

or

NG

OS,

priv

ate s

ecto

r in

volv

ed, m

unici

palit

ies

as ‘b

roke

rs of

char

ity,’

chan

ges i

n m

unici

palit

y law

allo

wing

them

to

acce

pt p

rivat

e don

atio

ns

Lega

l cha

nges

enab

ling

certa

in N

GO

S to

colle

ct

dona

tions

,

Tabl

e 2.

Ove

rview

of t

he w

elfar

e reg

ime c

hang

e in

Turk

ey (C

ont.,

)

Area

s of s

ocia

l po

licy

Org

aniz

atio

nal

rest

ruct

urin

gC

hang

ing

elig

ibili

ty

requ

irem

ents

, acc

ess

PRIV

ATIZ

ATIO

N O

nePR

IVAT

IZAT

ION

Tw

o

Dev

olut

ion

of se

rvic

e pr

ovis

ion

to lo

cal a

dmin

., co

oper

atio

n w

ith p

riva

te

sect

or, N

GO

s

Fund

ing

priv

ate

acto

rs to

pr

ovid

e se

rvic

es o

r tot

al

tran

sfer

of s

ervi

ce p

rovi

sion

, cr

eatin

g de

man

d fo

r pri

vate

se

rvic

es



(a) application of management techniques often observed in the private sector such as reduction in guaranteed benefi ts 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 benefi ts, 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 fi nally, 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

! ese 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-fl edged ‘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 fi scal constraints and debt sustainability. ! e defi cit 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. ! e ideas such as the fi nancial 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 fi scally sustainable were identifi ed 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

! e 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: " e 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 . ! e specifi c objec-tives were to : (i) re-structure MOH for more e" ective stewardship and policy making; (ii)



establish a universal health insurance fund; (iii) introduce family medicine as the model for the provision of primary health care services (iv) ensure fi nancial and managerial autonomy for all hospitals irrespective of ownership; and (v) set up a fully computerized health and social infor-mation system.

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. ! e idea was to increase administrative e# ciency and coordinate between highly scattered funds. ! e unifi cation 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 benefi ciaries.

! is did, however, raise questions about creating a giant bureaucracy. When one considers the fact that social security defi cits 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. ! ough streamlining the social security system under one bureau-cracy can increase ‘e# ciency,’ reduce the inegalitarian hierarchies in terms of health and pension benefi ts 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 fi nancing public and private health service. Not surprisingly, private hospitals quickly gained the upper hand in competition and their share in Social Security



health expenditures rose by 64 percent during 2002-2007 while that of state hospitals fell by 33 percent. 38 ! e number of private hospitals jumped from 269 to 365 in only two years, from 2005-2007. 39

Many opposed such cooperation. ! e 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 confi rm that the private hospitals and clinics have been a booming business, and that interna-tional insurance companies such as AIG and Allianz have fl ooded 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 fi scal 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. ! e public health care costs have risen by 17 percent between 2002-2007 in fi xed prices (a 200 percent dollar increase). 41

Altinok and Ucer 42 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 defi cits and increases the need/dependence for foreign exchange. 43

38) Onur Hamzao$lu and Cavit I&ık O$uz in ‘Packaging Neoliberalism: Neopopulism and the Case of Justice and Development Party,’ Alper Yagci (MA ! esis, Department of Political Science and International Relations, Bogazici University, Istanbul, 2009), 83. 39) TC Sa$lık Bakanlı$ı Tedavi Hizmetleri Genel Müdürlü$ü in ibid ., 11. 40) TC Ba&bakanlık Müste&arlı$ı 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/fi les/SagliktaDonusumSurecindeSaglikHarcamalari-son.doc. 42) Ibid . 43) In a Sunday interview, Turkish Medical Association (TBB) ‘stated that holding the focus of the debate on the fi gures of the medication consumption per capita was not healthy, and proved



Another example of privatization is found in the education of handi capped children. In 2005, the government began giving fi nancial 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 ! ough, at fi rst 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 fi nancial 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 fi rst 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 ! e 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. ! e ratio of the medication consumption to the national income in Germany, where the medication consumption per capita is $308, is 0.95 percent. ! is fi gure 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. ! e TBB proves through these fi gures 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. ! e 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. ! e defi cit of medication trade has exceeded $3 billion, and the ratio of the export’s ability to cover the import has dropped to as low as 8 percent. ! e foreign trade defi cit, increasing year by year, and our current account defi cit are to blame also in this huge trade gap that formed in the pharmaceutical commerce.’ See Ercan Yavuz Ankara, ‘Turkey World Leader in Medication Consumption,’ Sunday Szaman , July 1, 2007, http://www.sundayszaman.com/sunday/detaylar.do?load=detay&link=1380 . 44) Yagci, 2009, 82 (see note 37). 45) SHÇEK Genel Müdürlüg$ü (www.shcek.gov.tr).



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 ! e 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 signifi cant reason was the continued reliance on the family. Even the 1976 Legislation on Social Disability and Old Age Pension Funds, for instance, defi ned 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’ benefi ts, incapacity, family support, active labor market policies, unemployment ben-efi ts 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 fi gures 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. ! e founding

46) Pinar Ilkkaracan, ‘Rearticulating the Relationship between Family and the State in Neoliberal Turkey: ! e Case of Care Services,’ unpublished paper (2009). 47) E$itime %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: ! e Case of Turkey,’ New Perspectives on Turkey 38 (2008): 96.



of the directorate itself in 1986 was, as Bugra and Keyder 50 rightly argue ‘an implicit admission that the family-based solidarity may no longer be su# -cient.’ But institutionally, the directorate was under-funded and insignifi cant for many years. ! e 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 signifi cant 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 O# ce 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 Yardımla$ma ve Dayanı$ma Vakıfl arı , SYDV) located at the city and provincial level that work in quasi autonomy from each other as well as the Directorate General. ! ese 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 specifi c 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 fi gures, 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 , Bo$aziçi 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 .



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 o" 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 e&ya’ 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!

cash transfer to poor families to send their children to school. Yagci 54 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 signifi cant 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 fi nancial institutions, the potential for patronage politics and the use of these funds for political purposes has risen signifi cantly. 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 ! e 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 defi nitely e" ective in target-ing the poor, the degree of arbitrariness in defi ning 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 e" ectively 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



58) Bogazici Universitesi, Social Policy Forum. 59) Ayse Bugra and Ça$lar Keyder, ‘Kent Nufüsünün en yoksul kesiminin istihdam yapısı ve geçinme yöntemleri’ (‘! e 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 o# cials chose to terminate the Green Cards of certain Alevite individuals belonging to communities in several villages that were

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 fi ne-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, ‘! e 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 defi ned 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 fi eldwork that has been done on this issue, for instance, a ‘deserving poor’ is defi ned as divorced, orphaned, elderly and handicapped. A young man of working age is asked to ‘fi nd work’ and ‘persuaded’ to fi nd a micro credit and is hardly ever granted a ‘Green Card’. 59 ! e 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 specifi ed 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 di# cult. ! is uncertainty, has in turn, created enormous room for discre-tion and interpretation of the laws by local o# cials fueling patronage net-works and clientelism. 60 Who gets to defi ne the ‘deserving poor’ and how



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 o# cials 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. ! e 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. ! ey ask us: why did you give Green Cards to these people?’ ! is 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).

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. ! is 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 fl uctuation 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, ! e 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 infl uence.

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



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.

among those passed since 2004. Candan and Kolluo$lu’s 62 summary of the e" ect of these laws provides a useful overview: ‘Municipality laws introduced in 2004 and 2005…made the already infl uential o# ce of the mayor even more powerful. ! ese 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) defi ning new responsibilities of the municipality in dealing with ‘natural disasters;’ and (5) outlining the fi rst 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 O# ce) 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 defi ned. A most recent ethnographic work in a municipality outside of Ankara, for instance, found grave inconsistencies in the way social assistance programs are implemented,



63) R. E. Aydogan, ‘Deeper into Charity?: ! e Social Assistance Mechanisms in Turkey and the Case of Greater Municipality of Ankara’ (MA ! esis, 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: %leti&im, 2008).

fi nding them extremely subjective when it came to defi ne 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 fi nance 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 ! ere 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. ! is was yet another sign that the government was still convinced that poverty can be eradicated through private entrepreneurship and work. 65

! e 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. ! e 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 infl uence 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 fi ll the social vacuum left by the absence of a full-fl edged, 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



66) ! e German a# liation of Deniz Feneri has been charged and found guilty for corruption and 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, ‘! e Political Economy of Islamic Finance in Turkey: ! e Role of Fethullah Gulen and Asya Finans, in " e 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: " e Gülen Movement (New York: Syracuse University Press, 2003).

organization was given the authority by the Council of Ministers, to collect donations from the public without prior permission, refl ecting the ease with which the government has managed to subcontract social assistance to private charities. 66 ! e 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 fi rms in wide range of sectors from fi nance to textiles, more than 2000 schools, and seven universities in ninety countries, TV channels, newspapers, magazines and one-hundred foundations are all a# liated 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 su# cient dorms, high quality public education at all levels, these organizations have fi lled the vacuum.

Two aspects of community-based philanthropic aspects are problematic, however. For one, they tend to be non-transparent, which raises questions of



70) Who, for instance, gets to defi ne the ‘modern Muslim’ or the eligibility criteria for some of these resources? 71) Binnaz Toprak, Din ve Muhafazarlık eskeninde ötekile&tirme (Othering on the nexus of reli-gion and conservatism), Bogazici University Fund and Open Society Institute, 2008.

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 a# li-ation and loyalty are expected in return for access. 70 ! ere 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 fi rst 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. ! e 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 su# cient 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 fi nancial institutions, it is clear. As described above, this institutional ‘welfare mix’ actually has a lot in common



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 fi scal 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 e" ect, the institutional diversifi cation and pluralisation of welfare provision in the country has not reduced the political power of the state but helped to reproduce it in very di" erent 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 fl exibility within the ‘new’ welfare regime, one can certainly argue, widens the scope and sharpens the govern-ments’ ability to use specifi c social welfare provisions and vastly expand social assistance programs for political purposes. ! us as the state retreats from some of the social services, the simultaneous fi ne-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.

! is politicization can also explain why there has not been any signifi cant 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 di" erent, as there are fewer organized constituencies and/or economic groups engaging in these debates. In the specifi c 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,’



72) Haggard and Kaufmann (see note 4); Hall and Soskice (see note 3).

through providing fl exibility to the local actors, enabling private-public part-nerships, and encouraging NGOs, can provide more e" ective mechanisms—albeit less transparent and less accountable—to expand the political reach of the government than the simple transfer of public money.

! e 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 signifi cant globalization pressures and fi scal constraints that pressure both the mature and immature welfare regimes towards signifi cant 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 signifi cant ques-tions about the dichotomist discussions on the increasing or declining role of the state.

! e 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 fi rst place that has created the ‘indirect’ welfare mechanisms to begin with. Once such populist compromises were locked in, undoing them was very di# cult. Given the severity of the 2000/2001 fi nancial crisis and the pressures from IMF and the World Bank for fi scally sustainable and more cost-e" ective welfare regime, however, a shift in welfare governance has become inevitable. ! e nature and the content of this regime change, however, refl ected 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 insu# cient. More importantly,



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 fi scal con-straints. As such, Turkey’s welfare state has never been autonomous, but heav-ily infl uenced, 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 defi nition 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.


Retreating State? Political Economy of Welfare Regime Change in Turkey

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