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Democratization
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Is it none of their business?

Business and democratization,
the case of Turkey
Isik Ozel
Faculty of Arts and Social Sciences, Sabanc

University, stanbul, Turkey
Published online: 04 May 2012.
To cite this article: Isik Ozel (2013) Is it none of their business? Business and
democratization, the case of Turkey, Democratization, 20:6, 1081-1116, DOI:
10.1080/13510347.2012.674369
To link to this article: http://dx.doi.org/10.1080/13510347.2012.674369
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Democratization, 2013
Vol. 20, No. 6, 10811116, http://dx.doi.org/10.1080/13510347.2012.674369
Is it none of their business? Business and democratization, the

case of Turkey
Isik Ozel
Faculty of Arts and Social Sciences, Sabanc University, Istanbul, Turkey
(Received 24 February 2011; nal version received 1 February 2012)

This article explains how the Turkish business regime preferences have
evolved from pro-authoritarian to pro-democratic in the context of dual
transitions, in response to changes in incentive structures shaped by
domestic, regional and international parameters. It particularly focuses on
big business and highlights the central role that greater exposure to
international competition during the course of opening up and liberalization
played in the evolution of its regime preferences. The article suggests that
the central mechanism which has led to the regime preference change is
socialization by strategic calculation facilitated by business increasing
incorporation into transnational networks. It asserts that the Turkish big
business experience is particularly interesting because international
exposure not only created new opportunities for big business, but also new
divisions and rivalries within the business community. These new rivals
formed ourishing alliances with the government, with their accompanying
claims to power that challenged the big business previous hegemony in
accessing state resources. In the process, big business fear of losing its
privileged status to rival business groups and the resulting uncertainties led
big business to associate democratization with higher benets, as they
became increasingly aware of the link between democratization and
diminished uncertainties, through their interaction with transnational
business networks. Consequently, big business consolidated its prodemocratic stance as shifting domestic alliances enhanced the need for
diminishing uncertainties, while internationalization along with the prospect
of EU membership increased the cost of status quo.
Keywords: business; democratisation; Turkey; liberalisation; EU; regime
preferences; Europeanization; transnationalisation; socialisation; interest
groups; developing countries
1. Introduction
Turkey does not only suffer from a current account decit, but also from a major
mit Boyner, President of the
democratic decit.1 This was the core message U
Board of Directors of the Turkish Industrialists and Businessmens Association
Email: ozel@sabanciuniv.edu
# 2012 Taylor & Francis
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I. Ozel
(TUSIAD), delivered in her inaugural address on 21 January 2010 before the

General Assembly. Emphasizing the urgency of the completion of Turkeys
democratization process, she furthered: In this new world, a well functioning
democracy and legal system are indispensable conditions for markets that work
smoothly and without being obstructed by inappropriate and arbitrary interventions [by politicians]2 in her speech at the High Advisory Council on 1 October
2010.
Despite such an overt declaration, Recep Tayyip Erdogan, the current Prime
Minister, accused TUSIAD of not being sincere enough about its democratic
stance, severing the relations between his government and the Association.
Revealed on the verge of the referendum of September 2010 on some constitutional amendments proposed by the ruling Justice and Development Party
(AKP), confrontations between the Turkish big business and the government
intensied further with Erdogans audacious statement: Those who choose to
remain impartial today will nd themselves excluded later in reference to
TUSIADs refusal to endorse a vote in the referendum.3 Emphasizing that the
Prime Ministers statement was unfortunate, the Association underlined that
it avoided endorsing a particular vote in the referendum, as it was not convinced
that a yes vote would lead to higher democratic standards in Turkey.4 While he
did not specify what exclusion indeed meant, Erdogans tone has widely been
interpreted as a means of threatening with respect to the use of a number of
policy tools to tame the big business into adopting the positions in line with
the governments preferences, a common practice in Turkish state-business
relations.5 Policy tools selectively used for this purpose included a wide array
of measures ranging from limiting access to state resources such as the subsidies,
concessional loans from state-owned banks, participation in state bids along with
exclusion from consultation platforms which brought the state and business
actors together. Governments opting for a stick has also been construed as a
signal of governments intent to intervene in business activity in ways some
found arbitrary or without solid legal grounds such as selective tax auditing or
arbitrary law enforcement.6
TUSIAD, the organisation representing big business in Turkey, has been one of
the most prominent actors in Turkish civil society since the 1980s. The organisations economic importance stems from its representation of large industrial
and commercial interests (mostly large conglomerates, called groups) that
produce around 50% of the total non-public value added and 65% of industrial production; carry out 80% of overall foreign trade volume (excluding energy) and
provide 50% of the total non-public employment in the Turkish (formal)
economy, with its relatively small membership size (600 individual members in
control of 2500 companies).7 Its political importance, on the other hand, originates
from its signicant role in shaping up the public opinion, as well as its inuence on
policy-making. Aware of its political inuence, TUSIAD regularly publishes
reports on political issues as a medium to publicize its views since the late
1980s. Recently, these reports have often been highly critical of not only the
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governments, but also the state establishment, representing a dramatic change in

the attitude of the organisation towards the establishment8. In January 2007,
TUSIAD published 130 Years in the Turkish Democracy, the fth report on
democratization which criticized the lack of full democracy in Turkey, causing
considerable tension between TUSIAD and the Turkish state establishment. The
Turkish military in particular declared the allegations and the statements in those
reports to be outrageous and unacceptable.9
Big business emphasis on democratization is a recent phenomenon in Turkey;
business in general and big business in particular did not publicly question pervasive practices of authoritarianism such as military interventions until the late 1980s.
As a matter of fact, the Turkish military and big business were always on good
terms with each other, prior to this period. The latter eagerly supported the
military intervention of 1980.10 This support was reciprocated by the military,
which banned all 23,667 civil organisations in Turkey immediately after the
1980 coup, but TUSIAD.
Over time, big business has undergone a substantial transformation from being
the former ally of the military, agreeing to a number of authoritarian practices under
both military and elected governments, to the zealous advocate of democratization
even at the risk of being shunned by the main pillars of the Turkish state establishment. Then, what explains such a drastic change of regime preferences of the
same organisation? More generally, under what conditions do big business
regime preferences change?
Searching answers to these questions, this paper argues that big business
regime preferences can change, as incentive structures and the context in which
the big business operate change. Greater exposure to international competition
during the course of opening up and liberalization may play a central role in
this. Constituting a major critical juncture, liberalization triggers new processes:
it creates new opportunities for big business, while it may, paradoxically, create
rivals. At the domestic level, such exposure may engender new divisions within
the business community and accompanying claims to power, leading to rivalry
against big business previous hegemony in accessing the state resources. A few
studies already identied Turkish business changing regime preferences.11 This
study aims to contribute to the extant literature by delineating the conditions
which facilitated such change.
In the Turkish case, liberalization and the resulting internationalization processes have indeed led to two parallel developments. Big business increasing
links to international markets and transnational networks which facilitated socialization, and an increasing rivalry within the Turkish business community caused by
the emergence of new business actors who started raising claims for political
power, as well as economic power reected in their increasing market shares
and access to state resources. Fear of losing their privileged status (regarding
both market shares and access to state resources) to rival business groups with
ourishing alliances with the government, and the resulting uncertainties led big
business to strongly associate democratization with higher benets.
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I. Ozel
The purpose of this study is to identify the conditions and processes which
provoke changes in big business actors regime preferences drawing from
Turkish big business responses with respect to democratic transition. In order to
achieve this, the study utilizes the process tracing method which is considered
useful in understanding the microfoundational dynamics of decision making and
preference formation as well as those of values, motivations, perceptions, beliefs
and learning at both individual and organizational levels, essential components
of this study which analyzes business behaviour.12 The process tracing method
is germane in this study, as it helps narrow the list of potential causes of a particular outcome and identify the causal paths along with their rivals, while connecting the phases of decision-making process.13 Rather than focusing on the outcome
of preference change alone, this study carries out an analysis by studying and
disaggregating the preferences made under specic constraints along with
perceptions and expectations shaped by complex economic and political dynamics.
Thus, the process tracing helps clarify the mechanisms in this study through
which preference change occurred, while it helps identify and discard alternative
mechanisms. The study uses particular observations as pieces of data to provide
information about mechanisms.14 It ought to be emphasized, however, that the
study does not necessarily claim that changing preferences of big business has
led to democratization, as its scope is limited to explaining the mechanisms
nis also underline, big businesss impact on
of such change. As Bayer and O
democratization may end up limited unless its pro-democracy promotion is
accompanied by that of the political elites as well as the public.15
A key mechanism this study suggests to underlie business preference change
is socialization, dened as a process of inducting new actors into the norms, rules
and ways of behaviour of a given community16. Given that there are different
ways in which socialization may take place, this study proposes that the socialization of Turkish big business actors mainly worked through strategic calculation
regarding norm adaptation rather than mere normative persuasion. Taking an
instrumental approach to the mechanism of socialization a la Schimmelfennig,17
this study assumes that the actors eventual preferences are formed based on
cost-benet analyses in the context of evolving conditions, thus changing incentives. Emphasizing the need to specify the conditions under and channels
through which norms are adapted, the study also suggests that the existence
of clear incentives and disincentives and resulting instrumental action played a
central role in business actors promoting democratic norms. Examining
complex interactions between international socialization of political actors,
incumbents and opposition parties alike and domestic political dynamics,
Schimmelfennig analyzes compliance in Central and Eastern Europe regarding
democratic norms based on an instrumental approach which incorporates
rewards and punishment of compliance and non-compliance. Though adopting a
similar approach, this study carries socialization from international to transnational
level, as it focuses on non-state actors and their links with transnational networks.18
It explores calculations of business actors, rather than of reforming incumbents,
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and explicates how big business adapts norms in line with such calculation, and
accordingly, pressure the state for regime change. While mere normative persuasion of Turkish business could also explain preference change, this study demonstrates how such alternative mechanism largely fails in that as the analysis of
business actors responses to crucial events demonstrates.
This study adopted a triangulation of methods. A total of 40 in-depth semistructured interviews with business leaders, politicians, and bureaucrats; content
analysis based on an extensive archival research on government and business
organisations documents, press releases (particularly of TUSIAD, MUSIAD
and TUSKON) along with media research; and secondary research which entails
a comprehensive literature review on business, political regimes and transnationalization. The in-depth interviews, which last between an hour and three hours, were
conducted in Ankara and Istanbul in different time periods between 2003 and 2010
and their distribution amongst leading business organizations were as follows: 20
with TUSIAD members, 10 with TUSKON and MUSIAD ofcials and members.
In addition to business elites, state elites ve bureaucrats and ve politicians who
have held posts between 1990 and 2010 were also interviewed. Although the
interviews basically aimed to understand regime preferences of business elites as
well as their recent change if any, the questions were not directly posed as
such due to their normatively-loaded nature. Instead, the interviewees were
asked about their actual responses to major events and processes in Turkeys
as well as their organizations recent history. Then, these accounts were crosschecked with the empirical data on business responses to those particular events
and processes (gathered through archival research on the documents of organizations and media survey) to be able to discount business potentially-misleading
yet, norm-conforming retrospective accounts vis-a-vis their democratic
preferences. Business elites from different organizations were also asked about
changing conditions of the general business and political environment in Turkey.
Semi structured interview format enabled a dynamic dialogue where issues
raised triggered new questions and accompanying responses.
The use of elite interviews helped reveal how these actors were affected by
changing conditions; how they perceived prospects, uncertainty and threats they
face and evaluated their regime preferences accordingly; how they interacted
with transnational networks; how they perceived democratization with respect to
their material interests by means of questioning their attitudes based on strategic
calculation and normative stances. After having crosschecked with the archival
data, the ndings were used to establish sequences between events and changing
preferences in different time periods and conditions. Figure 1 below describes
the suggested sequences which led to a change in big business regime preferences.
The discussion in the rest of the paper is organized as follows. The next section
reviews the literature on business attitudes towards democratization. Section 3
portrays the historical background against which democratic transition of the
Turkish big business has taken place by providing an overview of state-business
relations in Turkey before liberalization. Section 4 sets out processes that led to
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I. Ozel
Figure 1. Between liberalization and preference change: causal sequences.
changes in big business regime preferences: 4.1. focuses on the role of internationalization and transnational networks and resulting socialization of business
in adopting democratic norms through strategic calculation; 4.2 examines new
divisions and rivalry within the Turkish business community that emerged as a
result of the liberalization process; whereas 4.3 discusses why an alternative
explanation based on normative persuasion would not provide as plausible an
explanation to explain Turkish business changing regime preferences. Section 5
offers additional evidence for the changes in big business regime preferences to
substantiate the arguments in Section 4. Finally, Section 6 concludes.
2. Business and democratization

The recent literature offers valuable contributions regarding the role of civil society
in general and business in particular in the process of democratization.19 Beetham
and Peace examine the relationship between the spread of market economy and
democracy in shaping the interests of civil society.20 Although the literature has
signicantly expanded in analyzing recent democratization through multifarious
dynamics of external and domestic actors, this study suggests that domestic
business change of regime preferences remains insufciently theorized, as the
recent changes it has gone through have not been paid adequate attention. Most
studies in the democratization literature seek to explain democratization per se,
drawing causal links to democratization from a broad range of factors such as
the level of development, inequality and capital mobility;21 external factors like
membership in international organisations, proximity to democratic countries,
regional economic agreements;22 diffusion of norms;23 and the interaction
between the domestic and external factors.24 While these studies offer valuable
insights as to what causes democratization, they mostly fall short of a microfoundational analysis.
Indeed, the analysis of the role of business in democratization was rst carried
out by the earlier wave of the literature on European history and capitalistic development which emphasized the role of bourgeoisie in promoting democracy. The
canonical work of Barrington Moore suggested that a strong bourgeoisie, in
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1087
antagonism with the landed elites, was the driving force behind democratization,
encapsulated in his famous phrase: No bourgeoisie, no democracy.25 Some
later studies in the literature, however, challenged such links between the bourgeoisie and democracy, arguing that democracy was established in several
countries by the efforts of the working classes and in spite of those of the
bourgeoisie.26 According to this view, the bourgeoisie, indeed, allied with antidemocratic forces in later phases of political development particularly in
extending political rights to the masses.
Thus, the stage of political and economic development and the organisation of
social interests in those stages mattered for the bourgeoisies carrying the ag of
democracy. Organisation of working class particularly by socialist parties at the
time of democratic transitions mattered in the bourgeoisies democratic stance.27
In general, this literature suggested, contrary to the perspective a la Moore, the
bourgeoisie even challenged the democratic regimes and allied with the authoritarian rule whenever its perception of threat regarding property rights intensied.
Most striking examples of such contingent support for democracy has been
discussed by the bureaucratic authoritarianism literature which underlined the
bourgeoisies support for the eclipse of democracy and its close alliance with
authoritarian regimes in several late-developers in the 1960s and 1970s.28
Hence, business in developing countries was not generally considered an agent
of democratization given its close ties with the authoritarian regimes. The
commonly accepted view was that business, a usual ally of the authoritarian
regimes, would not support democratization, since its interests are furthered
under authoritarian regimes.29 Analyzing businesss varying stance towards
democratization in the context of late-development, Bellin calls business together
with labour as contingent democrats for the very reason that they are consistent
defenders of their material interests and they will champion democratic institutions when these institutions are perceived as advancing their material interests.30 Bartell and Payne assert that business does not have strong preferences
for particular regimes, as they are adaptive actors supporting any regime as far
as their material interests are secured.31 In this vein of instrumental analysis of
nis also point out that big businesss
pro-democratic preferences, Bayer and O
contribution to the consolidation process is contingent on the broader institutional
and political environment and pro-democratisation aspirations of big business . . .
[are] often induced by powerful external pressures.32
2.1 Third wave of democratization
In a recent wave of the literature, businesss regime preferences are re-examined
within the post-Cold War context in which dual transitions have been undertaken.
The transition to market economy and the transition to democracy, while the two
were considered closely linked.33 Hagopian and Mainwaring emphasize the emergence of an unprecedented elite support for democracy in the Americas in the
context of this third wave of democratization in a context where the ideological
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spectrum has narrowed, leading to a nearly ideological consensus about dual transitions.34 Recent studies on transitions depict business support for re-democratization as contingent upon a specic context where organized labour and its links with
political parties weakened; fear of radicalism in the society waned; and business
position in the process of neoliberal adjustment strengthened.35 Highlighting varying
nis
responses of business actors in different contexts, Bellin as well as Bayer and O
emphasize cross-country variation within the institutional and political context of
late-development, while the latter authors also underscore the existence of crosstemporal variation in big businesss democracy promotion in cases like Turkey.36
Despite the anticipations of most studies regarding the replication of earlier waves
of democratization, some recent studies demonstrate that the variation is, indeed,
considerably large as businesss pro-democratic stance has been rather limited in
several cases, the most prominent of which are China and Thailand.37
Recent literature suggests that international level factors might alter the cost of
non-democracy for domestic actors.38 Businesss exposure to global markets
affects business preferences, particularly in case of capital mobility.39 It makes
domestic businesses more sensitive to perceptions of credibility about their
nis and Turem suggest as business establishes itself as a global actor,
country. O
it demands a new type of state.40 Given the prevalent demand for capital
inows into emerging markets, domestic business have vested interests in yielding
credible signals to investors, the most central of which is securing of property
rights41. Recent studies state that foreign direct investment is likely to go to democracies because of well-protected property rights.42 As Acemoglu and Robinson
nd out, democracies perform better than autocracies in terms of securing property
rights, promoting stability and credibility, and reducing uncertainties.43 Thus,
there is a strong and positive association between democratic institutions and the
investment climate within which domestic and foreign businesses operate as the
recent literature convincingly demonstrates.
Number of studies underlines the role of norms in democratization asserting
that democratic norms dispersed as democracy became the only game in town,
while authoritarian regimes were disapproved by multilateral organisations,
nis, however, appraise such optimistic
states and non-state actors.44 Bayer and O
anticipation of norm internalisation based on sound scepticism.45 They assert
that the intra-elite conicts and existence of other strong preferences (such as secularism as a constraining factor in cases like Turkey) which might compete with
democratisation may thwart a coherent and consistent promotion of democratisation and democratic consolidation.
Regional level factors also played an important role in democratization.46
Without a doubt, the regional organisation with the highest capacity to spread
democracy is the EU through making democratization a criterion for membership.47 In addition to the EUs impact on democratization, Youngs emphasizes
the importance of domestic demand for democratization, examining the interaction
between the EU and domestic level; and the resulting cross-country variation.48
Whitehead asserts that regional integration may accelerate actors change of
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regime preferences and membership prospects may enhance the perceived cost of
non-democracy for business actors.49
Youngs points out socialization as a key difference between the EU and the US
with respect to promotion of democracy, mainly focusing on intergovernmental
socialization through network of formal and highly institutional cooperative frameworks.50 Similarly underlining the role played by socialization in the context
of the EU, Schimmelfennig applies an instrumental approach to adaptation of
democratic norms by the political elites in the accession process of the
CEECs.51 Pridham, however, purports that a shift from instrumental to conviction-based adaptation regarding norms and beliefs of political elites may, indeed,
take place in the post-accession process.52 All these accounts are limited to socialization of political elites and they disregard similar processes occurring at the
non-state level. Applying a similar perspective, that is, socialization, this study
incorporates non-state actors and the ways in which they have been socialized
into democratic norms through transnational networks.
Further, recent studies highlight the increasing role of transnational business
networks in global governance in general and the European integration in particular. Cowles and Apeldoorn state how the advocacy and lobbying activities carried
out by the European Round Table of Industrialists (ERT) have had a substantial
impact on the political economy related outcomes (affecting both institutions
and policies).53 In a later work Cowles demonstrates how the Transatlantic
Business Dialogue (TABD) has affected state-business relations in individual
countries within the EU.54 These studies mostly examine the processes in which
transnational elite networks mediate the ways in which political economy of the
EU integration and global governance are transformed. The present study contributes to this literature by exploring the impact of those networks on the transformation of the regimes in individual countries particularly in the process of the EU
accession, drawing from Turkeys democratization process. However, it should
be underlined that the emergence of such transnational bourgeoisie may generate
democratic decits through unequal representation at the global and regional
levels.55 Concurring about this concern, the present study points out an interesting
dilemma. While transnational business networks may generate democratic decits
that pose signicant risks for liberal democracy, they may, ironically, promote
democratization in semi-democratic countries, particularly in the context of the
EU accession.
3. State-business relations in Turkey before liberalization
Historically, there was a close alliance between the Turkish state and big business.
Big business was nurtured by the state within the context of a state-led development strategy originally initiated in the 1930s. Turkish state-led development
began in a context where business elements were mostly lacking, as most business
actors of the late Ottoman Empire, who had overwhelmingly been constituted of
non-Muslim elements, had been all but eliminated in the dissolution of the
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empire through wars; the massacre and deportation of the Armenian community;
and the convention of compulsory population exchange between Greece and
Turkey in 1923.56 In such an environment, new business actors were basically
created in order to constitute a national bourgeoisie.57 The outcome of such
nurturing was the creation of a state-sponsored big business based on a high
level of capital concentration, dependency on states resources and the domination
of large conglomerates with access to multi-sectoral investment and inter-rm
proprietary structures as the main corporate structure. This ruling bargain was
exemplied by the ISI Pact roughly between the 1930s and 1980s based on
lucrative adjoining arrangements of the import substituting industrialization (ISI)
regime, making big business its main beneciary, at the expense of small and
medium sized enterprises (SMEs).58 The relationship between the state and the
privileged elite was one of a cooptation that the former usually maintained the
latters acquiescence through a subtle balance of carrots and sticks. Carrots
were provided in the form of incentives such as an overly-protected market, tax
exemptions, privileged access to credit, import quotas and policymaking, while
sticks entailed either the reversal of these incentives or in a rather harsh form
like legal penalties enforced arbitrarily.
This implicit pact, which was common to most countries with ISI regimes, had
another core component in the Turkish case: secularism. Big business represented
by TUSIAD, defended secularism staunchly in close alliance with the Turkish
secularist state establishment (including the military) up until the late 1980s,
adding an interesting dimension to the interplay between business community
and the state. Dependence on the states resources and the rents distributed by it
played an important role in the solidication of this secularist alliance, which
remained unchallenged until the rise of conservative parties with roots in political
Islam in the 1990s.
Since it was conceived in the late 1940s, Turkish democracy has been interrupted several times through relatively short-lived military interventions in
1960, 1971, 1980 and 1997.59 Though major democratic reforms have been undertaken in the last decade, democratic consolidation has not yet been completed.60
The Turkish case is also interesting because the countrys candidacy for the EU
membership puts ahead clearly dened targets for democratization.
Turkish big businesss role as a close ally of authoritarian political authorities
can be clearly observed in the 1980s. The rst observation regarding business
regime preferences is the support of big business for the military regime (1980
1983) and its product the 1982 Constitution, signifying a rm alliance.61 The
repressive environment paved the way for an opposition-free milieu during
which a thorough stabilization programme which had previously been launched
by a democratic government, the so-called January 24 package, was implemented
and applauded by big business.62 According to the interviews conducted, the end
of radicalism of the 1970s posed by organized labour, extralegal groups and
leftist parties was a big relief for businesses.63 Additionally, this new era of
market opening entailed major incentives for big business, particularly export
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promotion, enhancing business support for the military regime.64 In this period,
big business never condemned authoritarianism.65 The contrary, it considered
authoritarian regime a reliable guard to protect property rights which had been
perceived as at risk in the late 1970s.66
4. State business relations after liberalization

This studys tracing of processes which have led to a change in business regime
preferences goes back to economic liberalization in Turkey, a critical juncture
which have triggered various processes with signicant ramications on statebusiness relations. The alliance between big business and the state has been confronted by new divisions and the resulting within business rivalry in the current
economic and political landscape of Turkey, where not only economic policies
have drastically shifted, but also strict secularism has been contested since the
1990s.
4.1 Internationalization and big business transnational networks in Turkey
A major outcome of liberalization process since the 1980s has been internationalization of Turkish big business through various channels including foreign
trade, investment and partnerships (joint ventures, franchise and distribution
network deals, etc.). Businesses owned by all interviewees have increasingly
been internationalized through a combination of these channels since the 1980s
and this process expanded further since 2001, as business search for new
markets intensied following the severe crises in the Turkish economy. According
to TUSIADs data, the share of TUSIAD members in overall foreign trade volume
of Turkey (excluding energy) is estimated to be nearly 80%.67 Overall exports
volume of TUSIAD members is roughly estimated to have increased from $10
billion in 1990 to $20 billion in 2000; and to $90 billion in 2010.68 Internationalization and big business incorporation into transnational business networks (both
organisational and individual) accelerated the mechanism of socialization, leading
to big business adopting norms of democracy through strategic calculation.
A systematic analysis of the data compiled by the elite interviews identies two
major channels through which business interests are furthered through democratic
institutions. First, predominance of democratic institutions facilitates formation of
joint ventures, franchise and distribution network deals and the like with foreign
companies that seek political and economic stability, and such cooperation is
increasingly needed by big business situated in emerging markets that are highly
integrated to the global economy. Secondly, concerned about their competitiveness, big business actors consider international actors perception of uncertainties
in Turkey. Eighty per cent of the interviewees (a total of 28) mentioned their intensifying business deals involving international partners or transactions (such as
foreign borrowing through international banks and its links with Turkeys credit
ratings one of whose determinants is the level of democracy. Moreover, 90% of
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the interviewees asserted that uncertainties associated with semi-democracy/

absence of democracy harmed their businesses, hence explaining their support
for further democratization.
After establishing links to global and regional markets, big business becomes
more sensitive to international and regional players perceptions of credibility.
Democratic institutions help big businesses stay competitive vis-a`-vis foreign companies in domestic or international markets, since political and economic uncertainty in the home country increases the so-called country risk, raising, in turn,
the cost of credit (particularly from international markets) and investment due to
endangered credibility of the country.
Big business incorporation into transnational networks played a critical role in
spreading ideas about the urgency of democratization in Turkey and framing links
between democratization and business interests; along with providing strategies to
accelerate the ongoing democratization process. These networks socialized
Turkish big business into democratic norms by means of helping them link their
interests to democratization and frame their preferences in a norm-consistent
manner. According to the interviews with business elites, they learnt the advantages of democracy through their exposure to these networks and understood that
well-established democratic institutions would diminish uncertainties from which
they suffered immensely.69 Seventy per cent of the TUSIAD members interviewed
(14, out of the total 20) emphasized the importance of such learning; 60% of
them have been individually exposed to transnational networks via participation
in meetings, summits, commissions organized abroad or Turkey; and an overwhelming 90% associated undemocratic and semi-democratic regimes with
heightened uncertainties. An interviewee who was actively involved in transnational networks taking up managerial positions asserted that incorporation into
those networks nearly became a mind-opening experience through which they
came to an understanding which was radically different from before.70
Big business socialization by these transnational networks took place via
strategic calculation since they adopted democratic norms when they considered
democratization suitable to their material interests; and perceived the cost of
challenging the status quo as less than the potential benets of democratization.
As TUSIADs organizational as well as its members individual ties to
these networks got stronger after the 1990s, TUSIADs pro-democratic attitude
has been more overtly set and then consolidated within the last decade. Naturally,
such socialization could also have taken place via mere normative persuasion.
Section 4.3 below indicates why mere normative persuasion, as an alternative
mechanism, fails to explain socialization of Turkish business actors.
All interviewed businessmen uttered internationalization and/ or international dynamics when they explain their new democratic stances, while 80%
of them also mentioned their interactions with their counterparts at the international
and regional levels. Business leaders (particularly the presidents of TUSIAD)
gradually intensifying interaction with and their taking managerial positions
in transnational networks played a signicant role in linking norms and interests,
Democratization
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and framing strategies about democratization process accordingly. The most

remarkable displays of a pro-democratic stance by TUSIAD have occurred
during the terms of Presidents who have been most tightly incorporated into the
transnational networks. Such exposure, then, facilitated gradual consolidation of
a pro-democratic stance within the organization.
The most important transnational business networks TUSIAD as an organization and by its individual members has interacted with are the Confederation
of European Business (BUSINESSEUROPE), Business and Industry Advisory
Committee (BIAC) and the European Round Table of Industrialists (ERT). A
recent trend is TUSIADs participation in the formation of transnational networks
in Turkeys close vicinity such as the Union of Mediterranean Confederation of
Enterprises (BusinessMed) and the Union of Black Sea and Caspian Confederation
of Enterprises (UBCCE).71
Since 1987 TUSIAD has been a member of BUSINESSEUROPE, formerly the
Union of Industrial and Employers Confederations of Europe (UNICE), the
umbrella organization representing the European private sector in various platforms vis-a-vis the EU. TUSIADs EU-Brussels Representative Ofce acts as a
permanent delegation of BUSINESSEUROPE. TUSIAD has become increasingly
active in this network as the frequency of interactions augmented signicantly
since the 1990s. Currently, TUSIAD participates in all major meetings and
commissions of this umbrella organization.72 TUSIADs Presidents of the Board
of Directors have been highly active on the boards of BUSINESSEUROPE,
including Halis Komili, a former President (1993 1996) who also served as the
Vice Chairman of UNICE between 1995 and 1997. It was, in fact, during
Komilis presidency when the rst wave of pro-democratic mobilization took
place through the publication of Democratization Reports. According to a
former president of TUSIAD, BUSINESSEUROPE membership was a milestone
in TUSIADs history and it played a signicant role in the process of big business
adapting to a new world.73
The Business and Industry Advisory Committee (BIAC), a voluntary organization which channels business communities advice and counsel to the OECD and
its member countries, is another major transnational network TUSIAD has taken
part of since 1999. Currently Tuncay Ozilhan, an Advisory Board member and a
former President of TUSIADs acts as BIACs Vice-President of the Board of
Directors. Frequent interactions between TUSIAD and BIAC generate an apt
space for socialization.74
In addition to the organizationalties between TUSIAD and transnational
business organizations, some members have also built strong individual links
with transnational organizations, the most important being the European Roundtable of Industrialists (ERT) which is Europes most elite business organisation with
45 individual members and considerable capacity to affect policymaking.75 Since
1985, the ERT has granted membership to leading Turkish industrialists amongst
the prominent members of TUSIAD and it currently has two Turkish members.76
ERT members convene twice a year at Plenary Sessions which establish Working
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Groups where Turkish members have so far been fairly active. It has helped
establish Business Advisory Councils (BACs) at the company level to act as a
consultation body between the government and European investors. The ERT
has also been an active lobbying agent for Turkeys EU accession by publishing
reports supporting Turkeys membership.77 It formed the Turkish-EU Enlargement
Council to foster Turkeys integration process and all these activities have been
undertaken by the active incorporation of ERTs Turkish members. Interviews
with Turkish business elites indicated the role of the ERT in framing their
preferences and building strategies about economic and political transitions in
Turkey.78 A member of the ERT (and of TUSIAD) stated,
ERT was like a school where not only we were exposed to many new ideas, but also
we were forced to question the ideas we previously owned. For instance, we kept
arguing that Turkeys conditions were different, thus, for example, militarys
retreat could endanger subtle balances and, in return, they kept challenging our
arguments.79
Interactions through transnational networks did not only shape Turkish big
business regime preferences, but they also helped European business organizations shape their own views about Turkeys potential accession to the EU. Like
the ERT, BUSINESSEUROPE has also published reports supporting Turkeys
accession in cooperation with TUSIAD.80 TUSIAD lobbied with the member
organisations of the BUSINESSEUROPE, using their intermediation to access
state elites in the EU.81 Transnational business networks helped big business
monitoring democratization by providing apt strategies, while fostering the
solidication of a democratic consensus via generating a platform through
which the mechanism of socialization operated.
4.2 Liberalization and new divisions within Turkish business

Tracing processes leading to preference change has also displayed other outcomes
that liberalization triggered, the most important being the increasing competition in
the domestic market and resulting rivalry within business. This critical juncture
facilitated new entries into the domestic market, which had been extremely
limited before the 1980s. These new entrants have challenged the former hegemony of big business and a considerable number of those emerged with claims
for political power, mostly allying with the aforementioned religiously conservative parties. This process is further intensied in the existence of an incumbent,
AKP, as self-acclaimed conservative democrats combining liberal democracy
with a Muslim cultural identity.82
Big business that had beneted from a highly protected and concentrated
domestic market which provided them with facilitated access became increasingly
concerned about new entries. These new comers and their burgeoning alliances
with the state actors spawned uncertainties which, in turn, created another push
Democratization
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for big business to demand democratization. Business socialization played an

important role in the emergence of a learnt understanding that democratic
institutions would alleviate uncertainties.
New business actors, mostly small-medium sized entrepreneurs (SMEs), had
begun to integrate into the global economy, and some of those accumulated considerable wealth through export revenues since the 1980s.83 Mostly but not
exclusively owned and run by religiously conservative businessmen, these
newly rising businesses embraced free market ideas, deemed congruent with the
teaching of the Islamic orders.84 Beneting from the new space created by liberalization, these previously excluded actors, have raised claims for political power,
challenging the Turkish states close alliance with (secularist) big business. A
shared sense of exclusion and a common understanding that big business thwarted
their access to economic opportunities facilitated the mobilization by these
actors against the hegemony of big business in economic and political domains.
Collective identity has been strengthened by religious conservatism, mostly a
common thread in these new businesses identity. Initially referred to as Anatolian
Tigers, this group has experienced a signicant growth since the 1980s particularly in religiously conservative provinces, generating a major constituency for
the Welfare Party in the 1990s and the AKP in the 2000s.85
Previous exclusion of the SMEs from the ruling alliance stemmed from the
ISI strategy which prioritized secularist big business by shielding it from both
international and domestic competition. Highly politicized processes of resource
distribution (such as provision of import permits and quota allocations), regulations on imports favoured big business, while precluding the SMEs. Conglomerates were encouraged to specialize in distinct elds, partitioning the production of
consumer products, and providing a major incentive towards monopolization.
Hence, the playing eld was nearly competition-free for the big players, generating
oligopolistic prots in a large protected market and a major resource transfer to big
business.86
The criticism about the hegemony of big business had appeared long before
market transitions, mostly generated by political parties with roots in political
Islam. In the 1960s, Necmettin Erbakan, the leader of Islamist politics in
Turkey, accused big business of enjoying monopolistic rents, asserting that his
mission was to end the hegemony of Istanbul bourgeoisie.87 In the 1990s,
new business actors established new organisations with an objective of breaking
big business hegemony in state-business relations. The most prominent of these
organisations are the Independent Industrialists and Businessmens Association
SIAD), founded in 1990, and Business Life Cooperation Association
(MU
(ISHAD), founded in 1993, and nally in 2005, the Confederation of Businessmen
and Industrialists of Turkey (TUSKON, comprised of 162 business associations
such as ISHAD). With their nationwide networks and vast membership, these
new organisations have become major sites of new business actors mobilization
and formed new alliances with the state particularly after AKPs coming to
power, posing a serious rivalry against TUSIADs former hegemony.
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SIAD and TUSKON facilitate their

Through their vast networks, both MU
members interactions, business deals and access to international markets, an
important function for the SMEs which used to be restrained to local markets.
Using new tools generated by these organisations such as TUSKONs Foreign
Trade Bridges, SMEs are encouraged to export. A motto widely used by
TUSKON is that TUSKONs goal is to help transform petty-merchants to businessmen, businessmen to industrialists, industrialists to exporters and exporters
to multinationals.88 A striking aspect of such facilitated networking is building
trust amongst business people with similar religious and cultural identities.89
Thus, common identity and shared sense of previous exclusion has given rise to
mobilization of these new business actors to enhance their common material interests mostly entrenched against big business.
According to the interviews conducted with TUSKON and MUSIAD ofcials:
Big business in Turkey used to be the only beneciaries of the incentives distributed by the state. But now, there is a larger constituency amongst business, as the
base of capital has broadened, signifying the process of democratization in the
economic domain.90 This process is usually called as economic democratization
by the interviewed members and ofcials of these organizations, in the sense that
the social base of capital accumulation has been widening as the number of players
in the market increases.
These new businesses endorsed by increasingly inuential business organisations acquired a considerable capital accumulation in the last two decades.
Although there is no data on overall output or exports generated by the members
of specic organisations, it should be underlined that some of these recent entrants
are now amongst the largest 500 companies in Turkey.91 Moreover, the share of
businesses based outside Istanbul in the overall output and exports has increased
substantially, signifying a process of eastward shift.92 The networks and close
alliance with the state actors contributed to such impressive growth in a market
previously dominated by the state-owned-enterprises and companies of large
conglomerates.
Capital accumulation by religiously conservative business actors began to
translate into distinct political power in the 1990s with the rise of conservative
parties with roots in political Islam.93 A close alliance emerged between the
Welfare Party and MUSIAD, solidied during the coalition government the
Welfare Party took part in between 1996 and 1997.94 The AKP Government
which came to power in 2002 further empowered these businesses and their organisations. Whenever challenged by secular(ist) business groups, the AKP government moved toward these new organisations, opted for distributing state
resources to its new allies and incorporating these organisations into policymaking
platforms at the expense of TUSIADs exclusion. Currently, the most inuential of
these organisations hence, TUSIADs rival is TUSKON, the largest voluntary
business organisation in Turkey with its 14,844 individual members belonging to
151 associations and seven regional federations.95 Its inuence comes from its
close ties and ideological afnity with the current AKP government, bringing
Democratization
1097
about distribution of state resources. Some activities of TUSKON, such as the fairs,
are sponsored by the state, and the organization is provided with major incentives
through the Undersecretary of Foreign Trade via Council of Turkish Exporters and
the Association of Turkish Exporters. These ties facilitate TUSKONs nearly-privileged incorporation into all consultative platforms of economic policy-making.96
Whereas, TUSIADs inclusion in these platforms tends to be contingent upon its
relationship with the government, where, in fact, the presence of a tension
mostly results in exclusion due to the absence of institutionalized incorporation
of business into policy-making.97
Intensifying rivalry has brought about a widespread perception on increasing
uncertainties, which, then provided big business with another stimulus for a prodemocratic stance in order to tie up the state whose arbitrary interventionism
and shifting alliances were perceived as threats, as underscored by most interviewees.98 Although interviewees did not bluntly state that they embraced democratization as a safeguard against increasing rivalry, nearly all of them mentioned
uncertainties and linked those with the need for democratization; while some of
them also emphasized the shifting alliances of an untrustworthy state whose
hands needed to be tied.99 Those who mentioned the emerging alliances
between the state and new (religiously conservative) businesses provided several
examples regarding the risk of endangering their interests in a broad range
between the punishment of non-cooperating businessmen by means of arbitrary
taxes and lack of fair treatment (read as the governments prioritizing its new/
close allies) in the receipt of state resources.100
Challenged by rival business organisations forming a nation-wide web,
TUSIAD began to organize regional business interests in the 1990s to expand its
constituency.101 It rst led the foundation of the Associations of Industrialists and
Businessmen (SIADs), which then formed the Platform of Turkish Industrialists
and Businessmens Associations in 1996, leading to the emergence of an umbrella
organisation: Turkish Enterprise and Business Confederation (TURKONFED).
Established in 2004, TURKONFED provided representative legitimacy for
TUSIAD vis-a`-vis the EU as TUSIAD sought to alter its image of the Club of the
Rich with a limited constituency.102 Nevertheless, TURKONFED does not have
the inuence acquired by TUSKON (neither toward government nor its members).
The major difference between the two umbrella organizations each with their
own claims to represent Turkish business lies in governments overt alliance with
TUSKON and unsteady contact with TURKONFED as well as TUSIAD.
4.3 An alternative explanation: internationalization and normative
persuasion
Mere normative persuasion might have been an alternative mechanism regarding
business pro-democratic stance. It indeed, is a fact that a worldwide support for
democracy has prevailed since the late 1980s and democratization became the
dominant trend and the norm.103 Such trend in Turkeys close vicinity was
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particularly striking as the third wave of democratization had indeed started in

that region and one would expect that democratic norms could easily diffuse into
Turkish business. Accordingly, democratic transitions in Southern Europe such as
Greece and Spain, and later in post-communist states of Central and Eastern
Europe could be considered as major sources of potential norm diffusion.
Although Turkish big business might have been exposed to such prevalent
trend in their close vicinity, they began lobbying for democratization with a considerable phase lag compared to Southern Europe and even the CEECs, signifying that a mere normative persuasion did not immediately take place. This
however, does not necessarily suggest that norms did not disperse at all in the
early 1990s, but the hesitant stance of TUSIAD towards democratization
shows that only a small minority within the organization might have appropriated
these norms early on, which did not generate a solid pro-democratic perspective.
Such hesitancy is indicated by TUSIADs responses (or lack of those) vis-a-vis
critical events such as the February 28 Process and prominent members reaction against the Democratization Reports in the 1990s, as elaborated in the
following section.
It is important to note such lagging in business embracing democratization and
delineate the mechanisms through which belated appropriation of democratic
norms occurred. In fact, particularly during democratic transitions in Turkeys
vicinity, big business was indifferent if not supportive regarding a broad
range of undemocratic practices in Turkey. It was a close ally of the military dictatorship in Turkey during Greeces democratization process in the early 1980s;
and it was simply indifferent toward widespread human rights violations particularly in South Eastern Turkey (mostly but not exclusively as a result of
Turkish Armys raging war against Kurdish separatism) during the heyday of
post-communist democratic transitions in the CEECs. Even in the late 1990s,
the Turkish big business opted not to react strongly against the military intervention
toppling off the Erbakan government, as the following section will explicate.
Throughout the 1990s, democratic norms existed, and the third wave of democratization prevailed in the CEECs, Latin America and elsewhere, but Turkish big
business did not automatically adopt those norms and responded accordingly. Only
after uncertainties intensied in the domestic market and material costs and
benets became clear and sizeable, big business embraced a pro-democratic
stance. The EU accession process provided an available ground for clarifying
the incentives and disincentives and transnational business networks facilitated
dispersion of an understanding linking material benets to democratization.
nis clearly demonstrate that Turkish big businesss pro-democratic
Bayer and O
lobbying has lost intensity since 2007, in line with Turkeys losing prospects in
a recent process where: EU membership began to appear a more distant
project.104 They, furthermore, pinpoint the intra-elite variation with respect to
internalisation of democratic norms in the ranks of TUSIAD along with the
existence of competing priorities in the political and institutional context of
Turkey (secularism being the most prominent) even as recently as the 2000s.
Democratization
1099
Hence, normative persuasion cannot solely be considered the mechanism

through which Turkish big business socialized into democratic norms. Interviews
conducted with business elites, as the next section will show, demonstrate the role
of strategic calculation in adopting norms.
5. Changing regime preferences of Turkish business

Persuasion of the majority of big business about an overt pro-democratic stance
has, indeed, taken place in a long period out of a wavering process which is
traced below. By the time the interviews were conducted, most interviewees
seemed to have supported democratization when asked in general. When their
responses are cross-checked with their attitudes about and reactions on specic
events and phenomena, there appears a discrepancy. It should be kept in mind
that businesspeople may easily lter their responses and reframe them in a
norm-consistent manner (given the fact that most of the interviewees are public
gures in Turkey), usually recalling their previous attitudes by such retrospective
reframing. When they are asked about their attitudes which could be considered
un-democratic, then they often allege that: Turkeys specic conditions were
not apt for full democratization, but they necessitated certain interventions.105
Table 1 lists the answers as to why TUSIAD members have supported
democratization.
5.1 Big business: a contingent agent of democratization, the 1990s

Big business stance towards democracy changed in the 1990s, yet this was a contingent stance, as indicated by TUSIADs changing its mission statement from a
merely economic one to the one which included political objectives in the midst
of the 1994 nancial crisis.106 Big business perceptions were increasingly
shaped around the idea that the political regime was the main culprit of Turkeys
Table 1. Motives behind big business emerging pro-democratic perspective.
World is changing
EU accession process
Uncertainties caused by semi-democracy
Political system as the root of instabilities
Material interests/business deals
Learning
EU
Transnational networks
Other countries experience
Percentagea
Frequency b
90%
90%
90%
80%
80%
80%
70%
70%
50%
40
35
36
18
28
21
16
24
12
Notes: aPercentage of the total interviewees (20) who mentioned these motives at least once. bIndicating
the number of times these motives are mentioned in all interviews.
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crisis-prone economy.107 Eighty per cent of the interviewees suggested that the
problems of Turkish political system lie in the root of economic crises
and unless they are resolved, a meaningful economic development would
remain as a remote goal.108 According to a TUSIAD member, democracy was
considered as an end in itself and also as instrumental to economic development
and EU membership.109 A former TUSIAD president states:
The world was changing and we were aware of it. If Turkey sustained its imperfect
democracy, we knew that it would have been isolated from the world, which we
considered very risky. A non-democratic constitution would take Turkey apart
from the West, and this would be reected in economic life, one quick indicator
would be the foreign investment.110
It should be noted, however, that this perspective was not shared by all big
business actors in the 1990s, as they were far from unied regarding such perspectives. Businesspeople that had been exposed to transnational networks earlier than
the others seem to have adapted this perspective as pioneers. A common medium
TUSIAD that used to make public its ideas and critics are extensive reports on
various issues; since its inception in 1971 to 1990, TUSIAD had published 93
reports which were almost exclusively on economic issues, while nearly 20%
of all reports in the 1990s were about political issues.111 In this process of
repositioning itself vis-a`-vis the state, the central change in the second half of
the 1990s was the content of TUSIADs criticisms to the fundamental institutions
of the Turkish state along with proposals to transform those institutions. This
received considerable attention in the media, at the expense of risking the
associations relations with the state.
One of the outstanding observations here is TUSIADs rst report on democratization, the Perspectives on Democratization in Turkey published in 1997,
that took a critical approach to some of the sensitive issues of the Turkish state
establishment, such as the role of the military in politics and human rights violations.112 TUSIADs Executive Boards introduction to the report emphasized
that a liberal market economy could only be sustained in a democratic political
structure; TUSIADs mission was to ght for democracy; and Turkeys
democratic record was shameful. The report advocated substantial reforms in the
Constitution such as National Security Councils eradication and the abolition
of the bans on Kurdish and other minority languages.113
If we still think that it is not the right time to bring up these issues, and they are not
our business, then we, as the real owners of this country, the constituency of the
representatives whom we grant the authority to represent us; civil society organisations (NGOs) which were founded by the free will of the people, ought to ask ourselves this question: Who would it be if not us, when would it be if not now?114
In January 1997, Halis Komili, President of TUSIAD and Vice-Chairman of

UNICE then, submitted the report to the Chair of the National Assembly
Democratization
1101
marking a turning point where, for the rst time in civil societys history in Turkey,
the Turkish state and its institutions were harshly critiqued before the Assembly.
The reports critical stance against the militarys engagement in politics through
the National Security Council and the independent status of the General Staff
led to a severe upset in the state cadres, while its criticism of the restrictions on
minority rights were considered audacious.115 As a response to the reports
recommendation that the General Staff should be put under the authority of the
Ministry of Defence, the General Staff accused TUSIAD of being ignorant and
engaging in cheap political heroism.116 Several top-ranking generals in the
Turkish Armed Forces accused TUSIAD of having trespassed boundaries of the
state, declaring that the Turkish General Staff could not be under the authority
of the Ministry of Defence and Turkey could not be compared to Western countries
due to its sui-generis conditions that it suffers internal and external threats. . . and
the NSC is a sine-qua-non player in Turkish democracy.117
More importantly, given the objectives of this study, even TUSIAD members
did not fully endorse the report, as some prominent members objected severely,
accusing the Executive Board of having acted irresponsibly based on their personal
views.118 Absence of endorsement within TUSIAD impaired the potential effectiveness of the report, as some members alleged that the report did not represent
the majoritys perspective. According to Ishak Alaton, a prominent member, the
report disturbed many members of TUSIAD. . . just a few members endorsed
it. . . while many members vilied it.119 The divide within the organisation was
so striking that the report was not included in the Activity Report of that year
due to a pressure created by the opponents.120 Asm Kocabyk, a prominent industrialist, asserted that the report was not sufciently objective and did not represent
everybodys perspective, an opposition endorsed by Sakp Sabanc.121 Rahmi
Koc, the owner of Turkeys largest conglomerate, warned the Executive Board
that the report had been prepared without adequate consultation with
members.122 Several members, including some former presidents, protested the
report, exemplifying the lack of a collective pro-democratic stance within the
association by the time when third wave of democratization in the CEECs had
been on a solid track, thus showing the absence of normative persuasion. This
also indicated a major divide; some wanted to maintain the status quo regarding
the regime, while others argued that it was in TUSIADs responsibility to
monitor the state and democratization. This divide is usually interpreted as a
generational one that is the younger members had a different vision from that of
the older members, who were used to not challenging the state to which they
nis and Turem, however, claim that this divide mostly
owed their existence. O
nis highlight
stemmed from dependence on the state resources.123 Bayer and O
the persistence of intra-elite conict in the 2000s indicated by the organisations
ambivalent attitude in various issues.124 Such ambivalence has prevailed to
include democratic deepening in terms of expansion of civil and political rights
including religious liberties, which are perceived as threats to existing practices
of secularism by some in the business community.
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This studys ndings demonstrate that the transnational networks and resulting
socialization may help explain this divide within big businesss organisation, as the
Executive Board which was in charge of commissioning this report was comprised
of business people who had been most tightly exposed to these networks and
affected through the mechanism of socialization, as explicated in the preceding
sections.
Despite the absence of collective endorsement from all members, a signicant
outcome of the report was the public debate it generated, in the media and elsewhere, and it was used by various state and non-state actors internationally in
the following years within the context of Turkeys potential accession to the
EU.125 However, this particular observation indicates that the pro-democratic
stance within big business was not yet solidied in the late 1990s, as the following
section also demonstrates.
5.2 Remnants of pro-authoritarianism within big business in the late 1990s:
the February 28 Process
A month after the publication of TUSIADs democratization report, the last major
military intervention in Turkish politics, the so-called February 28 Process, took
place against the anti-secular policies and acts of the government, often referred
to as the postmodern coup.126 Leading to the collapse of the RefahYol coalition
government and banning of the Welfare Party with Islamist roots, the February 28
Process gave rise to fundamental divisions within big business constituting another
important observation in business regime stance. In line with the divisions regarding the Report on Democratization published in January 1997, TUSIAD did not
generate a rm reaction against the coup a striking difference when compared
to its reactions in the 2000s against the relatively minor interventions along
with interventionist discourse of the military. Such passive attitude signies the
un-solidied pro-democratic stance within the organization and the absence of a
normative persuasion despite increasing internationalization by 1997.
Although TUSIAD did not support the coup at the organizational level, some
prominent members of TUSIAD supported it at the individual level.127 Business
people who claim their passive stance with respect to the coup do not generally
associate this stance as one of an anti-democratic act, but recall the coup as
vital for sustaining the Turkish Republic as it is, because otherwise the secular
regime in Turkey would have been endangered.128 In addition to such prevalent
perception of threat against the secular regime, some in big business were also concerned about the rising economic power of the businesses with strong Muslim identity that were in a close alliance with the Welfare Party. These concerns were
triggered by increasing intra-business rivalry and ourishing alliances between
the government and these new business actors. Both organizational (mostly via
MUSIAD at the time) and individual connections between these new businesses
and the RefahYol Government paved the ground for resource redistribution.
According to some interviewed politicians of the time, big business was
Democratization
1103
particularly disturbed by the pool system established by the Erbakan government

in 1996, which cut off some of the rents generated by big business lending to
the state at high interests.129
Such concerns merged with those of the military whose reaction gradually
intensied against the rise of Islamist politics, as widely referred to by the secularist establishment and their supporters in the society. The February 28 Process,
then, launched a major intervention in the economic arena as well. It abolished
the pool system and launched inspection of a number of pro-Islamist businesses
and nancial institutions for their claimed ties to Islamist parties and transnational
Islamist networks. The secularist state establishment declared a erce war against
these businesses, including conglomerates, which began to compete with secular
big business in various areas, including privatization bids and state contracts.130
Alarmed by these businesses growing presence in strategic sectors, the military
prepared a list of fundamentalist companies and Islamic banks which became
subject to extensive auditing, leading to widespread bankruptcies. Finally, the
Erbakan government was accused of having favoured Islamist companies in
the privatization process, a claim shared by big business and the military.131
Big business mostly indifferent and the individual level somewhat supportive stance toward the February 28 Process was, in fact, synchronous with rising
competition in the domestic market and consequently increasing perception of
threat. This particular event and its repercussions help rule out mere normative
persuasion as an explanation.
Emphasizing the utmost importance of secularism in Turkish politics, Bayer
nis state that it has continued to play a signicant role in shaping at
and O
times constraining big businesss promotion of democratization.132 They
suggest that TUSIAD lacked a unied stance, as some members of the organisation
seem to have prioritized stability and secularism over further democratisation so as
to include civil and political rights.
5.3 Solidication of big business pro-democratic stance in the 2000s
Big business pro-democratic stance, which had been ambivalent at best in the
1990s, was solidied in the 2000s, signifying a thick socialization entailing preference change.133 Despite the intensifying tension with the AKP government, big
business has not sided with the military, nor did they support the so-called e-memorandum of April 2007, referring to a controversial statement about presidential
elections which was published on the website of the General Staff. Taking a position against Abdullah Guls presidential candidacy and widely considered as a
threat to the AKP, the statement said that: The Turkish Armed Forces is a side
in this debate and a staunch defender of secularism . . . [and it] will display its position and attitudes when it becomes necessary. No one should doubt that.134
TUSIAD made successive declarations, particularly following the e-memorandum
asserting that the memorandum of the military is against democracy.135 Unlike
in 1997, such declarations were not objected by TUSIADs own members, but
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there was a widespread support from TUSIADs membership base. Nevertheless,

this does not necessarily mean TUSIAD membership across the board was not
concerned about Guls candidacy. In fact, some members voiced their personal
concerns about secularism.136 But, such individual reactions did not prevent a
collective organizational reaction against the e-memorandum.
Lobbying for democratization intensied in the 2000s: Perspectives on Democratization was followed up by successive reports, turning into the instruments of
monitoring democratization process.137 Endorsement of the initial report by the
successive presidents granted it legitimacy, showing continuity in the organizations perspective. Opposition within the organization lost its fervour, as the
recent reports on democratization were endorsed by the majority of TUSIADs
members.
TUSIADs pro-democratic stance got bolstered after the 1999 Helsinki Summit
where Turkeys candidacy for the EU was announced.138 As the prospect of
EU membership became more concrete, the business perceived cost of authoritarianism increased. According to the interviews, prospective material interests out
of a potential EU membership were signicant because big business perceived
the EU as a powerful anchor which would tie the states hands, hence,
increase credibility, entailing sound economic policies and improved business
environment.139
Following Turkeys candidacy to the EU in 1999, a broad range of political and
legal reforms had to be undertaken so that the accession negotiations could be
launched.140 Major reforms have been carried out since 2001, giving rise to an
increasing Europeanization process of the Turkish state, including eradicating
militarys role in politics and reforming the National Security Council, the
Turkish Penal Code, among others. These processes were zealously supported
by TUSIAD, which took part in a pro-democratic platform consisted of various
business organisations to further democratic reforms.141 Underlining the striking
cooperation between the incumbent AKP and TUSIAD in the earlier wave of
nis refer to this period as the golden age of
the reform process, Bayer and O
Turkeys Europeanization (2002 2005).142 Such eager support, hence the
cooperation, has withered away particularly after 2007 as the prospects for a full
membership have dwindled, demonstrating its instrumental nature.
As anticipated by big business, reforms followed by launching the negotiations
generated credible signals for foreign investors, particularly originating in Europe.
FDI ows increased from an average of 0.5% of GDP in the period 1990 2004 to
about 3.5% of GDP in 2006 2007.143 FDI in Turkey originated in the EU rose
from about E450 million in 2003 to almost E9 billion in 2007 a twenty-fold
increase.144 Turkish big business beneted from the recent increase in capital
inows, as joint ventures, franchise and distribution network deals with foreign
investors expanded. It also beneted from the Customs Union Agreement after
which the trade volume between Turkey and the EU has almost tripled.145
Hence, the prospect of EU membership helped alter incentive structures,
strengthening big business pro-democratic stance.
Democratization
1105
Halis Komili, the President of TUSIAD when the initial report on democratization was published, asserts that: Big business had to embrace democratization, if
they took the prospect of EU membership seriously.146 Most interviewees
suggested that supporting government authoritarianism would endanger their
long-term well-being, as Turkey would become isolated from the world, and they
would miss the train of globalisation and fall back to the second-tier in the
nis and Turem point out increasing fear of
world-league.147 Eder as well as O
isolation within the business community in the 1990s, encapsulated in the view
that undemocratic practices would drag Turkey away from the West and lock in
business in an uncertainty-ridden environment of Turkish economy and politics.148
The EU anchor, hence, democratization, was perceived as a shield against
increasing uncertainties in the domestic sphere. While shifting alliances in the
domestic sphere provided the governments with a larger space for interventionism
by favouring those who support the government policies and punishing the ones
who criticize those policies, democratization was believed to tie up the states
hands, hence, thwarting arbitrary interventionism. Paradoxically enough, big
business that both beneted and suffered from state interventionism in different
time periods came to an understanding that democratization would diminish
state interventionism and arbitrary policy-making.149 Threatened by these new
alliances which strengthened after the Welfare Partys becoming a coalition
partner (1996 1997), and, nally, the AKPs coming to power (2002), big
business eagerly embraced the EU anchor, thus, democratization, further.
Nevertheless, such zealous support appears to lack a linear form, since it has
lost its initial fervour as the EU membership becomes an increasingly distant
goal. Since 2007, the AKP governments initial enthusiasm for undertaking
reforms towards Europeanization has slowed down, reecting and also affecting
general lack of genuine demands for further democratization in the majority of
the public.150 In this context where the momentum for democratisation is lost,
the record has largely been mixed. In some dimensions such as civil-military
relations, democratisation is furthered, while in some others including civil and
political rights, the situation is far from promising, as the liberties are increasingly
at risk. Given such reluctance of the ruling party and big businesss concerns
about secularism, TUSIADs stance has been more-or-less ambivalent. It has
taken a rm stance in some issue areas, while it has been rather passive in some
others including the most sensitive ones like the Kurdish issue.151
In these circumstances, a previously-virtuous cycle which prevailed until 2007
with respect to the cooperation between the government and TUSIAD towards
furthering democratic reforms, has become a vicious one in which both players
have lost momentum in pushing democratisation further. Thus, despite a major
leap forward, democratic deciencies still prevail in Turkey, while taking new
forms and whether a full democratisation, let alone consolidation, would be
attained is yet subject to question. TUSIADs losing fervour on this path compared to its earlier commitment, signies its instrumental behaviour in which the
material incentives associated with the EU played a signicant role.
1106
I. Ozel
6. Conclusion
This article tackled the puzzle of changing regime preferences of big business in
Turkey from pro-authoritarian to pro-democratic within the context of dual transitions. It took the discussion on business regime preferences from the domain
of capitalist development and democracy, to that of globalization, regionalization
and democracy. It identied the conditions and processes which facilitated
preference change such as market liberalization, increasing forces of globalization,
expanding within-business-divisions and rivalry, and increasing exposure to
transnational networks. The process induction which it utilized delineated that
the mechanism of transnational socialization by strategic calculation has been
the central path which brought about business preference change.
The article argued that over time, business actors came to an understanding
that a semi-democracy would be costly, given expanding processes of internationalization and regionalization. It demonstrated that two parallel developments
occurred following liberalization: (1) Greater exposure of business to transnational business networks which facilitated the mechanism of socialization,
linking democratization to credibility and, then, to business interests; (2) New
divisions and resulting rivalries within Turkish business, leading to shifting alliances in the domestic sphere and, then, increasing uncertainties for big business.
Challenged by these new domestic rivalries and intensifying international and
domestic competition, big business gradually came to an understanding that a
decient democracy would aggravate uncertainties at the national level, endanger
its international competitiveness, diminish the credibility of the country, obstruct
capital inows and thwart potential opportunities for collaboration with foreign
capital. Thus, business elites, who have learnt about the advantages of democratic institutions, opted for democratization and lobbied accordingly. In a
search for increasing predictability and credibility, they adapted ideas geared at
altering the political status quo and invested its resources in lobbying for democratization. Such adaptation occurred mostly instrumentally as shown by big
businesss behaviour in different conjunctures including the most recent where
big business has lost its previous zeal coinciding with dwindling prospects for
the EU membership.
This study showed the ways in which the mechanism of socialization operated
through transnational networks of non-state actors, rather than through intergovernmental interactions which the literature has more extensively explored.
Hence, the interactions between societies and the impact of such interactions on
the states prevail as salient phenomena in contemporary politics; and these
complex ties may also shape international and regional politics. Analyzing the
increasing power and activism of business actors by the forces of globalization
and regionalization, this study focused on the processes through which business
socialized into democratic norms. Future studies will shed further light on the
dynamics and measurement of socialization as well as the multifarious interactions
between transnational and intergovernmental forms of socialization processes.
Democratization
1107
Acknowledgements
I gratefully acknowledge comments and criticism offered by Sabri Sayari, Yaprak Gursoy,
Senem Aydin-Duzgit and Ates Altinordu on earlier versions of this article. I also thank the
reviewers and editors of Democratization for their useful suggestions which helped in
improving the manuscript.
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
http://www.tusiad.org/FileArchive/UMITBOYNERKONUSMA21OCAK20101.
pdf (accessed November 18, 2010).
http://www.tusiad.org/FileArchive/UB_Speech_YIK_eng.pdf (accessed November
18, 2010).
Prime Minister Erdogans speech at the Corum Meeting, 17 August 2010. http://
www.dha.com.tr/n.php?n=0b8dc886-2010_08_17 (accessed November 19, 2010).
http://www.milliyet.com.tr/tusiad-bitaraf-olan-bertaraf-olur-uyarisi-talihsiz-bir-yak
lasim/ekonomi/sondakika/18.08.2010/1277905/default.htm (accessed November
19, 2010).
Kalaycoglu, State and Civil Society in Turkey; Ozel, Beyond the Orthodox
Paradox.
The incidence of the excessive tax penalty on Dogan Group, a large conglomerate in
Turkey with large shares in media, is pointed out as an example of such intervention.
Imposed in 2009, this penalty has widely been interpreted as a revenge of the government on critical voices along with a major intervention in the freedom of the
press, opposed by many including the Human Rights Organizations. http://www.
ihd.org.tr/index.php?option=com_content&view=article&id=1631:dogan-medya-g
rubuna-verilen-rekor-vergi-cezasi-basin-ozgurlugu-alanindaki-ihlallerin-farkli-yont
emlerle-surduruldugunu-gostermektedir&catid=67:genel-merkez&Itemid=213
http://www.tusiad.org/Content.aspx?mi=1_43 (accessed November 16, 2010).
nis and Turem, Entrepreneurs, Democracy and Citizenship in Turkey.
O
The Military is Infuriated by TUSIAD, Cumhuriyet, 27 January 1997, 1.
Prominent business leaders expressed their gratitude for the Turkish military and sent
congratulatory messages to the armed forces, that it was the right thing to do, given
the chaos in Turkish politics, following the coup in September 1980. See the memoirs
of Vehbi Koc (1996) and Sakip Sabanci (1985).
nis, Turkish Big Business; O
nis and Turem, Entrepreneurs, DemocBayer and O
racy and Citizenship in Turkey.
George and Bennett, Case Studies and Theory Development; Checkel, Its the
Process Stupid!.
George and Bennett, Case Studies and Theory Development, 2067; Tarrow,
Bridging the Quantitative-Qualitative Divide, 1734.
Collier et al., Critiques, Responses, and Trade-offs, 252.
nis, Turkish Big Business, 197.
Bayer and O
Checkel, International Institutions and Socialization in Europe, 7.
Schimmelfennig, Strategic Calculation and International Socialization.
Schimmelfennig focuses on intergovernmental socialization by reinforcement and
analyzes political utility calculations of governments as he states that societies in
the CEECs are too weak to serve as effective agents of socialization. But, he
acknowledges that reinforcement can proceed through transnational channels as
well. Schimmelfennig, Strategic Calculation and International Socialization,
830 1.
Bellin, Industrialists, Labor, and Democratization; Bartell and Payne, Business and
Democracy in Latin America; Burnell and Calvert, Civil Society in Democratization;
1108
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
I. Ozel
nis and Turem, Entrepreneurs, Democracy
Boix, Democracy and Redistribution; O
and Citizenship in Turkey.
Beetham, Civil Society.
Lipset, Economic Development and Political Legitimacy; Przeworski et al.,
Democracy and Development; Boix and Stokes, Endogenous Democratization;
Acemoglu and Robinson, Economic Origins.
Pevehouse, Democracy from the outside-in?; Diamond, Spirit of Democracy;
Hagopian and Mainwaring, Third Wave of Democratization.
Diamond, Spirit of Democracy; Whitehead, Democracy by Convergence.
Levitsky and Way, International Linkage and Democratization.
Moore, Social Origins.
Rueschemeyer, Stephens, and Stephens, Capitalist Development and Democracy.
Huber and Stephens, Bourgeoisie and Democracy.
ODonnell, Modernization and Bureaucratic-Authoritarianism; Bureaucratic
Authoritarianism; Substantive or Procedural Consensus?.
ODonnell, Schmitter and Whitehead, Transitions from Authoritarian Rule.
Bellin, Industrialists, Labor, and Democratization, 179.
Bartell and Payne, Business and Democracy in Latin America.
nis, Turkish Big Business, 181, 1845.
Bayer and O
Huntington, Third Wave; Przeworski, Democracy and the Market.
Hagopian and Mainwaring, Third Wave of Democratization, 43.
Bartell and Payne, Business and Democracy in Latin America.
nis, Turkish Big
Bellin, Industrialists, Labor, and Democratization; Bayer and O
Business.
Chen, Capitalist Development.
Levitsky and Way, International Linkage and Democratization; Ylmaz, ExternalInternal Linkages in Democratization.
Boix, Democracy and Redistribution; Bellin, Industrialists, Labor, and
Democratization.
O
Geddes, What Causes Democratization.
Jensen, Democratic Governance.
Acemoglu and Robinson, Economic Origins.
Diamond, Spirit of Democracy; Geddes, What Causes Democratization; Linz and
Stepan, Problems of Democratic Transition.
nis, Turkish Big Business.
Bayer and O
Collins, Regional Trade Agreements; Pevehouse, Democracy from the outsidein?.
Di Quirico, Europeanisation and Democratisation; Kubicek, European Union
and Democratization; Pridham, EU Accession and Democratization; Youngs,
Democracy Promotion and European Union and Democracy Promotion.
Youngs, European Union and Democracy Promotion.
Whitehead, Democracy by Convergence.
Youngs, Democracy Promotion, 51.
Schimmelfennig, Strategic Calculation and International Socialization.
Pridham, Unnished Business, 21 2.
Cowles, Setting the Agenda; Apeldoorn, Transnational Capitalism.
Cowles, Transatlantic Business Dialogue.
Apeldoorn, Transnational Capitalism; Carroll, Corporate Power in a Globalizing
World; Scheuerman, Liberal Democracy.
Aktar, Turk Milliyetciligi; Gocek, Rise of the Bourgeoisie.
Keyder, State and Class in Turkey.
Democratization
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
1109
Krueger, Political Economy of the Rent-Seeking Society; Bugra, State and

Business in Modern Turkey; Ozel, Beyond the Orthodox Paradox.
Heper, Strong State and Economic Interest Groups; Toprak, Islam and Democracy
in Turkey.
See Turkey 2010 Progress Report, European Commission Staff working document,
http://ec.europa.eu/enlargement/pdf/key_documents/2010/package/tr_rapport_2010_
en.pdf (accessed November 14, 2010).
Arat, Politics and Big Business.
Ozel, Beyond the Orthodox Paradox.
Interviews with TUSIAD members, 6 January 2004, Istanbul.
Senses, Recent Turkish Experience.
Bayer and O
Gursoy, Civil-Military Relations.
There is no exact data available for TUSIADs share in exports. This particular gure
is based on the estimates of the General Secretariat of TUSIAD: http://www.tusiad.
org/tusiad/verilerle-tusiad/ (accessed November 19, 2010).
Rough estimates based on Turkish Statistical Institutes cross-temporal data on
foreign trade and TUSIADs estimates on its members share between 1990 and
2010. Sources: www.tuik.gov.tr http://www.tusiad.org/tusiad/verilerle-tusiad/
(accessed January 24, 2011) and interviews with ofcials at the Department of
Economic Research at TUSIAD (January 18 19, 2011).
Interviews with TUSIAD members, 1 July 2008 and 3 July 2008, Istanbul.
Ibid.
TUSIAD has been an observer since 2009 along with Italy, France, Spain and
Greece.
Recently, TUSIAD participated in the 7th European Summit in June 2009, the Meetings of Council of Presidents in June and December 2009 along with several working
commission meetings, as indicated by the latest annual report of TUSIAD. http://
www.tusiad.org/FileArchive/2009FaaliyetRapor.pdf, 59 60.
Interview with a former President of TUSIAD, 5 November 2003, Istanbul.
According to the latest annual report of TUSIAD (2009), TUSIAD participated in
various meetings and committees organized by BIAC such as the Board Meetings,
and the meetings held by the Secretary General of the OECD in October 2009.
http://www.tusiad.org/FileArchive/2009FaaliyetRapor.pdf, 5960.
http://www.ert.be/structure.aspx (accessed February 10, 2011).
Bulent Eczacbas and Guler Sabanc (both previous Presidents of TUSIAD) are
current members of the ERT. http://www.ert.be/members_by_country.aspx (accessed
February 10, 2011).
An important example would be the report entitled Turkey: A New Corporate World
for Europe, An Evaluation of the Implications of Potential Turkish Membership of
the European Union which was published a year before Turkeys accession negotiations started. http://www.ert.be/doc/01673.pdf.
Interviews with TUSIAD members, 4 January, 2004; 25 July, 2004; 18 August, 2008,
Istanbul.
As an example of these reports, See UNICE Reports on the Progress of Lisbon Strategy: Turkeys National Report, A Candidate Country Experience, Brussels, March 5
2003. http://www.tusiad.us/Content/uploaded/03-07%20LISBON%20STRATEG
Y%20-%20TURKEY.PDF.
An interview with a former President of TUSIAD, 3 July 2008, Istanbul.
Gulalp, Islam and Democracy.
Bugra, Claws of the Tigers; Gumuscu, Class, Status and Party.
1110
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
I. Ozel
Ozel, Islamic Capital and Political Islam.
nis, Political Islam at the Crossroads.
Bugra, Islam in Economic Organizations; O
Following his presidency of the TOBB, Necmettin Erbakan founded the National
Order Party in 1970, of which the so-called Anatolian bourgeoisie was a signicant
constituency.
Zaman Ekonomi, 6 March 2010., Excerpt from an interview with Rzanur Meral, the
Chairman of TUSKON. http://www.zaman.com.tr/haber.do?haberno=958685
(accessed May 12, 2011).
Interviews with TUSKON and MUSIAD members, 14 15 December 2010,
Istanbul.
Interviews with TUSKON and MUSIAD ofcials, 4 August 2004 and 9 December
2010, Istanbul.
Currently, the largest 500 companies based outside the traditional industrial centres
in Western Turkey realize more than 10% of Turkeys overall exports. An Industry
from Scratch is Emerging in Anatolia, Ekonomist, 6 October 2010.
According to recent data, between 1999 and 2009, the number of companies which
made into the Largest-1000 list rose from 16 to 32 in Gaziantep; and from 18 to 26 in
Kayseri, provinces popularly known as the Anatolian Tigers. See Caglar and
Kurtsal (2011).
Gumuscu, Class, Status and Party.
Ozel, Islamic Capital and Political Islam.
http://www.tuskon.org/hakkimizda/?id=tuskon (accessed November 15, 2010).
The prominent of these platforms are the Economic Coordination Council, Economic
and Social Council, the Board for Evaluation of Economic Problems, and the
Coordination Council for Improving the Investment Environment.
Interviews with TUSIAD members, 4 January 2004, 1 July 2008, 3 July 2008,
Istanbul.
Interviews with TUSIAD members, 5 July 2008, Istanbul.
Interviews with TUSIAD members, 35 July 2008, 10 June 2010, Istanbul.
nis and Keyman, A New Path Emerges.
O
http://www.turkonfed.org/indexeng.htm (accessed September 1, 2009) and interview
with Celal Beysel, the chairman of TURKONFED, 10 September 2009, Bursa.
Diamond, Spirit of Democracy.
Bayer and O
Interviews with TUSIAD members, 4 January and 25 July 2004, 1 July and 3, 2008,
Istanbul.
See http://www.tusiad.org/tusiad_cms_eng.nsf/TanitimENG.pdf (accessed July 2,
2009). O
Interview with a TUSIAD member, 25 July 2004, Istanbul.
Interview with a former President of TUSIAD, 28 July 2004, Istanbul.
O
http://www.tusiad.org/turkish/rapor/demokratik_tur/demoktur.pdf (accessed August
20, 2008).
See http://www.tusiad.org/turkish/rapor/demokratik_tur/demoktur.pdf (accessed
August 20, 2008).
http://www.tusiad.org (accessed August 25, 2008).
Milliyet, 24 January 1997, 1.
Democratization
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
1111
The General Staff: What TUSIAD Does is Cheap Heroism, Hurriyet, 22 January
1997.
The Military is Infuriated by TUSIAD, Cumhuriyet, 27 January 1997, 1.
See Ishak Alaton: TUSIAD Made Turkey Lose 13 Years, Milliyet, 7 February 2011, 8.
See Democracy Shook TUSIAD, Milliyet, 24 January 1997; The Report Divided
SIAD, Sabah, 24 January 1997.
TU
Among the opponents, Asim Kocabiyik and Sakip Sabanci claimed that the report
does not represent TUSIAD as a whole, because most of the members do not agree
with it . . . Its been published before any consultation within TUSIAD. Cumhuriyet,
24 January 1997, 9.
Milliyet, 11 April 1997.
O
Bayer and O
According to TUSIAD, the 1997 Report became a canon document proving the
Turkish private sectors search for a democracy apposite in global standards, and
its leadership in this respect. http://www.tusiad.org/turkish/rapor/demokpers10/
10yilguncel.pdf. (accessed August 1, 2008)
Toprak, Islam and Democracy in Turkey.
Interviews with TUSIAD members, 56 January 2004 and 25 July 2004, Istanbul.
Interviews with TUSIAD members, 25 July 2004 and 5 November 2003, Istanbul.
The pool system helped collect the prots of the public enterprises in public banks,
facilitating indebtedness between public companies and banks.
These conglomerates included Kombassan, Yimpas, Kaldera, Kubra and Jetpa.
Kombassan Holding, considered as a serious threat by the military, won the bid
for PETLASs privatization, a state-owned enterprise producing tires for the
Turkish army (Howe, Turkey Today, 142).
zcan and Cokgezen, Limits to Alternative Forms of Capitalization.
O
Bayer and O
Checkel, International Institutions and Socialization in Europe.
The fact that Mr Guls wife wore a headscarf created a considerable controversy
which had been initiated by the Republican Peoples Party (CHP). For further
explanation on the e-memorandum, see Gursoy, Businessmen and Democratization.
Gursoy, Businessmen and Democratization.
Bayer and O
For successive reports on Democratization, see http://www.tusiad.org.tr/
information-center/reports/ (accessed May 1, 2011).
nis, Turkish Modernisation and Challenges.
O
Muftuler-Bac, Turkeys Political Reforms.
The Turkish Union of Chambers and Stock Exchanges (TOBB), TUSIAD and the
Turkish Employers Union (TISK) became the leading organisations of this platform
which did not yield concrete results due to inter and intra-organisational power
struggles within business.
Bayer and O
Dutz, Us, and Ylmaz, Turkeys Foreign Direct Investment Challenges.
http://www.yased.org.tr/webportal/Turkish/Yayinlar/Pages/UDY-2006.aspx
Currently, the EU is the largest trade partner of Turkey about half of whose trade is
with the EU, while Turkey is the seventh largest partner for the EU. Source: www.
foreigntrade.gov.tr.
Interview with a former president of TUSIAD, 20 June 2003, Istanbul.
1112
147.
148.
149.
150.
151.
I. Ozel
Interview with a former president of ISO and TUSIAD, 21 July 2004, Istanbul. Also
see Kayhan Turkiye Demokrasi ile Gelisir.
nis and Turem, Entrepreneurs, Democracy and
Eder, New Regionalism; O
Citizenship in Turkey.
Interview with TUSIAD members, 4 July 2008 and 10 July 2008.
Noutcheva and Aydin-Duzgit, Lost in Europeanization.
Bayer and O
Notes on contributor
Isik Ozel is an assistant professor of political science at Sabanc University. She received her
PhD in political science from the University of Washington, Seattle in 2006 and held a
postdoc at the Institut Barcelona dEstudis Internacionals between 2006 and 2007. Her
research and teaching focus on international and comparative political economy and development. She currently works on political economy of regulation, varieties of capitalism in
emerging countries, Europeanization and democratization. She has published articles in
journals such as the Journal of International Studies, Regulation and Governance,
and New Perspectives on Turkey, among others. She has also published several book chapters on political economy and issues of governance. She is currently working on a book
entitled Institutions, State-Business Coalitions and Economic Development.
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This article was downloaded by: [Sabanci University]

On: 09 May 2014, At: 09:07

Is it none of their business?

Faculty of Arts and Social Sciences, Sabanc

PLEASE SCROLL DOWN FOR ARTICLE

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Is it none of their business? Business and democratization, the

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(Received 24 February 2011; nal version received 1 February 2012)

# 2012 Taylor & Francis

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(TUSIAD), delivered in her inaugural address on 21 January 2010 before the

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governments, but also the state establishment, representing a dramatic change in

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Figure 1. Between liberalization and preference change: causal sequences.

2. Business and democratization

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4. State business relations after liberalization

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the interviewees asserted that uncertainties associated with semi-democracy/

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and framing strategies about democratization process accordingly. The most

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4.2 Liberalization and new divisions within Turkish business

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for big business to demand democratization. Business socialization played an

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SIAD and TUSKON facilitate their

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particularly striking as the third wave of democratization had indeed started in

Hence, normative persuasion cannot solely be considered the mechanism

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5. Changing regime preferences of Turkish business

5.1 Big business: a contingent agent of democratization, the 1990s

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In January 1997, Halis Komili, President of TUSIAD and Vice-Chairman of

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particularly disturbed by the pool system established by the Erbakan government

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there was a widespread support from TUSIADs membership base. Nevertheless,

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Krueger, Political Economy of the Rent-Seeking Society; Bugra, State and

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