Is this a club we want to join?

Dunya Executive - - BUSINESS - Tugrul BELLİ Analyst

Only three weeks are left until the constitutional referendum that will impact not only Turkish politics but its economy. Should the referendum be approved and Turkey then move to an executive presidency, what kind of club of nations would we join?

There are close to 40 parliamentary democracies in the world and about as many countries with elected parliaments that also have a presidential system. In parliamentary democracies, predominantly found in Europe, the median per capita income, based on purchasing power parity, is $22.350. That figure in countries with presidential systems, which are prevalent in the Americas, is $11,300. In short, citi- zens in parliamentary democracies are twice as rich as their peers living under a presidential system. In other measures, such as the human development index or democracy index, parliamentary democracies come out on top.

It is beneficial to look at the longterm relationship between state administration and economic performance. There are currently 23 heads of states with executive powers in office for 10 years or more. Most of these are presidents, while a handful have the title of prime minister. Very few of these are parliamentary democracies, like Israel, Singapore and Germany. The rest are either underdeveloped or developing countries. In the last decade, these countries have enjoyed economic growth averaging 4.4 percent. During the same period, all underdeveloped or developing countries have seen growth of 5.8 percent. This shows that long-term presidents do not necessarily deliver stronger economic performance.

Among economists, there is no consensus on whether democra- cy accelerates economic growth or whether growth pushes democratization. Some point to South Korea, whose economic infrastructure was established under authoritarian rule prior to its democratization after 1980. In their book “Why Nations Fail,” economists Daron Acemoglu and James Robinson argue that this kind of growth can only be achieved when a small ruling group forms “extractive institutions” that ensure new technologies and institutional changes for their own benefit. But this cannot sustain lasting growth, they say. Sustainable growth can only be achieved through “inclusive institutions” that encompass a vast majority of the population in the administration of a country.

Citizens in parliamentary democracies are twice as rich as their peers living under a presidential system.In other measures, such as the human development index or democracy index...

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