Economic regulation models and analyses of externality and internality as to privatization: An application of Turkey (1980-2006)

The idea that State-Owned Enterprises (SOEs) could not operate existing resources efficiently has been started to be considered by the effects of stagflation crisis occurred in the 1970s and Neo-liberal policies. In this context, the rationality of privatization has been still discussed, it is known that the issue of at what extent of SOEs economies take advantage of market mechanism dynamics and cause social welfare loss or gain has been considered in the context of world literature. On the other hand, when the privatizations made in the last 40 years have been analyzed, the claim that projected ideal resource allocation has been achieved has been started to be questioned again with the 2008 global crisis. Even in all discussion platforms of the crisis, the question of ?Is this the end of the capitalism?? keeps its place as being one of the main agendas among economists and political scientists.Starting with industrial sample selected from SOEs which are subject to privatization, the aim of this thesis is to partially analyze the potential welfare loses and benefits from the point of Turkey and make contribution to economic decision making agents to evolve policy. As mentioned in the aim and the method of this research, by using secondary database, for privatized SOEs in cement, oil, iron and steel, and insurance sectors, TFP has been measured for the period of before and after privatization. Results have been evaluated by an original approach (Balance sheet based Kok - Kara approach) and the measurable net social benefit-opportunity cost magnitude of privatization has been computed for Turkey for the first time. In addition to this, the determinants of net social benefit-opportunity cost have been analyzed by Panel-SUR method. According to the stochastic and balance sheet based model results of the study, from the point of some industries / firms the privatization is necessity, but for some of them the privatization causes partial welfare loss was confirmed. In this framework, proposes which may allow policy makers to make new expansions has been developed.