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The response of private investment to structural adjustment—a case study of Turkey
Author(s) -
Günçavdi Öner,
Bleaney Michael,
McKay Andrew
Publication year - 1999
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/(sici)1099-1328(199903/04)11:2<221::aid-jid566>3.0.co;2-5
Subject(s) - liberalization , investment (military) , structural adjustment , economic reform , economics , private sector , economic policy , financial system , business , finance , international economics , market economy , economic growth , china , political science , politics , law
Much concern has been expressed about the apparently adverse response of private investment to structural adjustment and other economic reform programmes, even in countries where these reforms appear to have been fairly successful according to other criteria. This issue is examined for the case of Turkey, where private investment dipped significantly following the launch of the economic reform programme. Particular attention is paid to the financial sector reforms in that programme. While the high interest rates which were associated with financial liberalization did discourage investment, this effect appears to have been temporary, and financial liberalisation had the beneficial long‐term effect of relaxing credit constraints on investment, which had been an important feature of the pre‐reform era. Copyright © 1999 John Wiley & Sons, Ltd.