Commentary, Economy

The economic impact of a presidential system

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A presidential system will also allow better macro-policy coordination among the Finance, Development, Industry and Social Security Ministries and international trade, as there will be a clear line of upward hierarchy and better performance monitoring.

For emerging powers following multi-pronged strategies of proactive diplomacy and rapid growth and socio-economic development, the issue of speed in policy formulation and implementation has acquired a critical importance in recent years. The degree of dynamism and agility of public policy frameworks to analyze profound developments in regional and global contexts and devise effective responses in collaboration with key market actors and social forces determine the success or failure of structural transformation projects. This is a natural ramification of increased global integration and interconnectedness for state transformation.

President Recep Tayyip Erdoğan’s calls for social support to initiate a constitutional change for a presidential system in Turkey ought to be understood within this global context. Leading Turkey through the course of a turbulent decade marred with regional instability, global economic crises and domestic tribulations including post-modern coup attempts and closure cases against his party, Erdoğan knowns the value of political-economic stability all too well. Therefore, analyses interpreting the debate on a presidential system as nothing more than a personal demand by Erdoğan for more political comfort do not do justice to the issue. As the Turkish economy goes through a period of moderate growth due to global decline in demand and overcautious preferences of economic policy makers, Erdoğan’s push for a presidential system takes inspiration from a myriad of emerging power experiences in which political effectiveness and sustained economic growth was merged, at least periodically, such as in South Korea, Indonesia, Brazil and Mexico. One of the crucial advantages of a presidential system in terms of improving the effectiveness of macroeconomic policy making concerns is the clear separation of powers between the executive and legislative branches of government. As the president directly appoints ministers, there is more room for the galvanization of a rational/technocratic approach to issues of socio-economic development. In the Turkish case, this will mean a minimization of local political pressures distorting policy implementation through interventions of local party organizations, business circles, members of Parliament and ministers.

A presidential system will also allow better macro-policy coordination among the Finance, Development, Industry and Social Security Ministries and international trade, as there will be a clear line of upward hierarchy and better performance monitoring. Turkey’s current system is wrongly known as a parliamentary system, Parliament is extremely weak compared to the executive branch. Traditionally there is a strong Prime Ministry, but the ministries and agencies coordinating economic policy are loosely organized under a Deputy Prime Ministry that does not have an autonomous institutional identity or staff. Since August of last year, there is a popularly elected president in the powerful personality of Erdoğan. Therefore, to prevent confusion and conflicts of jurisdiction within the executive branch, a timely constitutional change to a presidential system is inevitable.

The economy needs a new development narrative with more emphasis on employment generation, manufacturing investments, high-quality foreign investment, research and development and technology transfer. Effective implementation of structural transformation reform requires a reorganization of macroeconomic governance frameworks, relations with big conglomerates and business associations as well as the secondary and higher education systems to increase the abundance of high quality human capital. For comprehensive reform in these areas, rapid decision-making and swift implementation is fundamentally important. A strong and well-structured presidential system will remedy coordination problems and make a crucial contribution to long-term political and economic stability. Hence, warnings of credit ratings agencies that categorically portray the shift to a presidential system as a source of political risk do not reflect a proper reading of the political currents on the macro level. Instead, the inner organizational architecture and structuring of a presidential system compatible with Turkey’s political traditions and current governance needs ought to be discussed objectively.

Resource: Daily Sabah, March 28, 2015

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Sadık Ünay worked as an academic at the Universities of Manchester, Birmingham, Huddersfield in the UK; and at Maltepe, Yıldız Teknik and İstanbul Şehir universities in Turkey. He is the author of Kalkınmacı Modernlik: Küresel Ekonomi Politik ve Türkiye (Developmentalist Modernity: Global Political Economy and Turkey) (2013) and Neoliberal Globalization and Institutional Reform: Political Economy of Development Planning in Turkey (2006). He currently teaches at Istanbul University.