ANALYSIS OF TRADE POLICIES AND PRODUCTIVITY OF TURKISH ECONOMY DURING 1970s and 1980s

Abstract: Protective trade policies possess an unfavorable reputation due to crude interpretation of comparative advantage theory and particular practices of protective policies in the developing countries after World War II. Recent developments in the international trade theory showed that there are forces other than comparative advantage influencing the patterns of specialization under international trade. Existence of massive increasing returns to scale in some important industries creates possibility for strategic trade policies that improve the long term prospects of countries. This dissertation is composed of two related parts. In the first part, Turkey’s two different trade policies undertaken during 1970s and 1980s are discussed in the context of the recent theoretical developments in international trade theory. In the second part of the dissertation, productivity dynamics of the Turkish economy is analyzed during the same periods using shift-share analysis.