Globalization and the Changing Political Economy of Distribution Channels in Turkey

Abstract

Since the 1980s, under the influence of global economic processes, there have been dramatic changes in the distribution channels of food, beverages, tobacco, and other fast-moving consumer goods in Turkey, resulting in a redistribution of both economic and social power. The outcome has been the rise of a few businesses, with others being left increasingly vulnerable in the face of a changing environment. Consequently, there has been an important power shift towards large and enormously influential corporations (active in retailing, distribution, as well as in manufacturing) from small manufacturers, retailers, and wholesalers who share commonalities with each other despite belonging to different sectors. One indicator of this shift is an ever-growing resentment among traditional communities, witnessed by their lobbying efforts as they look to the state to protect them from the devastating effects of intensifying competition. In this paper, the authors adopt a political economy approach in order to understand this power shift and to incorporate the larger political economy and the effects of globalization into their analysis. They show that these changing power structures are intrinsically connected to both the government's economic policy and also to global influences. In this context, three attributes of post-1980 Turkey are of primary interest: import liberalization, the opening up of the economy to global firms, and persistently high inflation and interest rates.