Social Network Analysis of Turkey's Economic Management

Ersan Volkan Demirel (I will not be taking the 2nd half of the course)

Background

After the elections took place on June 12, 2011 the new cabinet structure has been announced by The Prime Minister Recep Tayyip Erdogan following the approval of the President Abdullah Gul on July 6, 2011. The government introduced changes to the Cabinet structure which dissolved 8 ministries, established 6 new ministries and merged 2 ministries and transformed 2 others. As a result, there are 5 different economy-related ministries in Turkey as listed below;

·        Ministry of Finance: Responsible for finance, government expenditures and tax affairs.

·     Ministry of Economy: Deals with determining main policies and targets concerning foreign trade in goods and services, foreign direct investments and investment incentives.

·       Ministry of Development: Advising the government in determining Turkey’s economic, social and cultural development policies.

·         Ministry of Customs and Trade:  Responsible for customs and trade related affairs.

·       Undersecreteriat of Treasury: Manages public financial assets and liabilities, Regulates, implements and supervises economic, financial and sectoral policies. Also responsible for the coordination of international economic relations in cooperation with all economic actors.

This multi-headed, chaotic, dispersed economic management reduces Turkey’s macroeconomic efficiency/productivity and creates significiant amount of red tape as each Ministry have different opinions regarding what kind of macro-economic policies Turkey should follow. They also have numerous policy tools which can have significant effects on financial fundamentals.

Social Network Question

I would conduct a social network analysis of high rank officers (general director) medium rank employees (head of department, chief of section) and other public servants (specialists, experts). I’d like to see how the country’s economy management is inter-connected and which Ministry’s fields of duty are similar to each other? Which Ministry brings other together?

Hypothesis

I predict to find that Turkey’s economic management is not well-connected. I would expect to see a social network structure with high average distance given high level of red tape and uncertainty in terms of distribution of responsibility.  I predict that some Ministry’s area of responsibility overlap with each other. I wouldn’t be surprised if Ministry of Finance and Ministry of Development have the most between and popular (in-degree) officers as every other public institutions need their approval for budgeting and investment expenditures. Also the issue network analysis would show Ministry of Economy and Ministry of Customs and Trade are dealing with similar things as they are responsible for different aspects of foreign trade.

Data

I would prepare a survey so as to initiate a SNA on the institutional structure of Turkey’s economic management. There are too many independent units in those Ministries. When large number of general directorates taking into account, in order to reach maximum participation level and avoid having possible statistical problems I would try to form a sample that averagely represents the structure of the Ministries and choose 15 general directorates out of 35 and 10 different public servants (1 general director, 1 head of department, 2 chiefs of section, 6 experts/specialists) from each directorate.

Survey Questions

1)         Gender

2)         Age

3)         Education

4)         Title

5)         Department/General Directorate

6)         Main Question (how often you have turned to this person for formal paperwork, information or advice on work-related topics in the past one year? Please enter an answer for everyone, and leave yourself blank)

7)         Which Ministry do have similar agenda/field with your Ministry?

Methodology

Among whole network measures and other measures that show general communication structure, there are 2 main centrality measures I would look at ;

Degree: This measure would tell the most active and popular Ministries/employees in the network. This information would also help to determine which Ministry’s should have to power over main macro-economic decisions.

Eigenvector: This measure gives us the information regarding the most influential agents in the network. I believe that the Ministry with high-eigenvector degree should be a good example of others in terms of organization structure.

Conclusion 

As mentioned above, Turkish macro-economic policy decision process is inefficient due to its multi-headed and dispersed structure. A possible SNA could help to show there is an urgent need for re-organization of macro-economic management. For example the Customs and Trade Ministry can be merged with the Economy Ministry. As domestic and foreign trade will be assessed as a whole under the new model, there will no longer be separate ministries for domestic and foreign trade. The restructuring will be part of major economic reforms attempting to increase coordination and efficiency between ministries and to reduce bureaucracy.