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Unformatted text preview: British Journal of Middle Eastern Studies, May 2004 31 (1), 63–87 The Semi-formal Sector and the Turkish Political Economy MEHRAN KAMRAVA* A BSTRACT The general dichotomy in developing economies between the ‘for- mal’ and ‘informal’ economic sectors needs to be refined to account for the ‘semi-formal’ sector: one whose activities appear to be governed by formal rules and procedures but are, in fact, largely unregulated and unrecorded by the state. Using Turkey as an example of a transitional, developing economy, the paper situates the semi-formal sector in relation to the other two. Also important to examine is the level of autonomy which the semi-formal sector enjoys in relation to the state and other economic sectors. Autonomy depends on access to resources, and the use of these resources in pursuit of economic, political, or socio-cultural agendas. Three comparative lessons can be drawn: 1) despite state endeavours, a sizeable portion of seemingly formal economic activities go unreported and unregulated; 2) the semi-formal sector helps the perpetuation of a mutually beneficial relationship of mutual neglect between state and society; and, 3) the sector’s political agendas may best be characterised as one of ‘oppositional pragmatism’. The goal of this article is two-fold: first to introduce the concept of the semi-formal sector, and then to examine it within the context of the political economy of Turkey. Sandwiched in-between the formal and the informal sectors, the paper claims, is the semi-formal sector. As such, the semi-formal sector enters into a series of relationships, economic and otherwise, with both the formal and informal sectors and also with the state. For its part, while the state has very clear economic agendas, which in Turkey include the promotion of small and medium-sized enterprises, it has been unable to effectively bring the semi-formal sector under its financial and institutional regulatory purview. The semi-formal sector’s own agendas and preferences, which are often diametrically opposed to those of the state’s, further accentuate the objective and subjective divides that separate the two. What essentially results is a chasm between the state and one of the more popular classes of society. But, for reasons that are both organic and contextual, the semi-formal sector has not developed an ability to put its preferences into practice and to become a catalyst for major shifts or adjustments in prevailing patterns of state-society relations. Essentially, therefore, both the * Department of Political Science, California State University, Northridge Northridge, CA 91325, [email protected] Tel (818) 677–7235 Fax (818) 677–4502 ISSN 1353–0194 print/ISSN 1469–3542 online/04/010063-25 2004 British Society for Middle Eastern Studies DOI: 10.1080/1353019042000203449 MEHRAN KAMRAVA state and society, or at least the state and the semi-formal sector, continue to operate in separate, largely unrelated plains, as if in a condition of near-perpetual...
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This note was uploaded on 08/06/2009 for the course ECONOMICS ECON424 taught by Professor Alperduman during the Spring '09 term at Izmir University of Economics.
- Spring '09