Structural Change and Industrial Policy in Turkey

This paper presents evidence on structural change in Turkey and provides an overview of the evolution of industrial policy in the last three decades. Turkey has experienced substantial growth in labor productivity in the last decade and this has been associated with substantial change in the composition of value added and employment both in the overall economy and within the manufacturing industry. The paper discusses the contribution of reallocation both at the macro and the micro level. We also document substantial change in the composition of exports. Our assessment is that structural change was not primarily associated with industrial policy, if anything because the incentive system displayed little sectoral selectivity during the period when major structural change took place. We also discuss the limitations of the quality of recent growth.  

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