Explaining the Origins and Rise of Strong Business Associations in Turkey

Thursday, 2 July 2015: 8:30 AM-10:00 AM
TW2.3.02 (Tower Two)
Lisa Sezer, London School of Economics and Political Science, London, United Kingdom
Economy-wide voluntary business associations[1] (BAs) are ubiquitous in emerging economies, but we know little about why such cross-industry associations arise and develop into strong[2], persistent organisations. This relates to the bigger question of under which conditions strong organisations with potential developmental functions develop in emerging economies, with important implications for these countries’ democratic consolidation and economic development.

Existing literature treats BAs either as purely economic institutions (Olson, 1971, 2000; Khanna & Rivkin, 2001; Khanna & Yafeh, 2005, 2007; Luo & Chung, 2005) or focuses on political elites’ strategic policy and power interests (e.g. Baccaro, 2003; Culpepper, 2011; Lehmbruch, 1984; Markus, 2007; Schmitter, 1974; Schneider, 2004; Streeck, 2006) in explaining the rise and persistence of strong EVBAs. A variety of strong economy-wide voluntary BAs have emerged in Turkey since the 1970s and persisted to this day, and have, albeit their politicisation and polarisation partly fulfilled developmental functions. Turkey’s BAs are inadequately explained by rational and functional theories focusing on policy needs of a corporatist state and its elites, or on BAs’ provision of missing market resources and rents. Such approaches focus on incentives provided to political and state actors. The ways, through which BAs engage in political struggles and mobilisation and become active political actors and invest into their organisational properties to engage in power struggles, remain ignored. However, there are many settings in which competing business interests are allied with different political parties in deep intra- state power struggles. Varied cases, such as Russia under Putin (Markus, 2007), Argentina (Schneider, 2004), Brazil (Guimaraes & Gomes, 2004), and Indonesia (Hefner, 2011) show that BAs can mobilise their membership base and engage in political competition by building strong organisations and by cooperating with political and civil society actors based on shared political goals.

In this paper, I argue that this inadequacy can be addressed by adopting a historical and social movement perspective that pays attention to the contingent political-institutional context in explaining the origins and functions of EVBAs. Based on an in-depth case study of Turkey’s BAs, I explore under which conditions and how BAs have emerged and developed into strong organisations.

I find that intra-state dynamics conditioned by the broader and historically embedded state-civil society relationship, play an unexpectedly large role in shaping business development in Turkey even since its integration into a neoliberal global economy. To explain the conditions under which business collective action becomes politicised and organised, I relay on a key concept from the social movement literature—the political opportunity structure[3]. I argue that intra-state conflicts led to the vulnerability and exclusion of political and business actors from economic and political participation and the strengthening of BAs as alternative platforms. When traditional political institutions are exclusionary, BAs can fill that void and fulfill functions of political mobilisation and support, resource-exchange, as well as identity building. Certain features of the political and business context, most notably competition with rival associations, capitalist tools offered by economic liberalisation, and decentralisation projects have shape the transformation of BAs and their specific organisational form in Turkey. The incentives for such political action, however, cannot be understood without reference to the power-relationships between societal actors conditioned by the state-civil society relationship during the transition to modern and capitalist nation states.

The study of Turkey’s BAs may have implications for the study of BAs in other transition economies, in which economic development has been driven by states cut off from civil society, that at the same time suffer from a low capacity (Buğra, 1994; Evans, 1996; Woolcock, 1998). Civil society and business in particular can become an active part in such intra-state conflicts where state and/or political elites are vulnerable, and platforms for political participation are closed off. This is often the case in countries, which are in the process of transformation from strong authoritarian and military regimes, creating conflicts between old and new political institutions and elites. Where such conflicts additionally overlap with ideological, ethnic or other social cleavages, business politics can become fragmented and organised along such lines.

This paper introduces a political explanation for the origins of strong organisations, which views them as political organisations seeking power and actively taking part in intra-state power struggles. This examination process allows me to put forward an alternative framework to the study of interest groups and BAs. Such a framework is attentive to the historical and political origins of business power and to contextual institutional variables in contrast to neo-institutional and policy-related perspectives, which are non-political and functional. Instead, this economic sociology approach regards BAs as structurally, culturally and politically embedded (Beckert, 2010; Zukin & DiMaggio, 1990). All of these social structures powerfully shape the types of opportunities, constraints, and organisational patterns that businesspeople and BAs face as they seek political and economic advancement (Granovetter, 1973, 1985).

[1] I define business associations as ‘long-term organizations with formal statutes regulating membership and internal decision-making in which the members are individual business people, firms, or other associations that are not necessarily linked by ownership or contractual ties.’ (Schneider, 2004: 23). This excludes state-chartered associations with or without compulsory membership. Economy-wide voluntary business associations represent members from all industries.


[2] Organisations with strong structures have rich resources (in terms of staff, membership fees/available budget) and effective internal intermediation structures (Schneider, 2004); that is organisational structures that allow mediating between central/leadership and local/members’ interests, between control and interest aggregation (Schmitter & Streeck, 1999). In other words, strong organisational structures effectively represent members’ interests to external actors (if that is part of a BA’s activities) and allow for the integration of a variety of local interests.

[3] Political opportunity structures are ‘consistent – but not necessarily formal, permanent, or national – sets of clues that encourage people to engage in contentious politics’ (Tarrow, 2011, p. 32)