The role of fiscal policies in getting out of the middle income trap: The case of Turkey

Liberal policies that emerged with globalization have created differences in the economic structure of countries. With the spread of foreign trade and the increasing importance of exports of value-added products in trade, changes have occurred in public policies. The possibility of being caught in the middle income trap has increased due to the inability of countries with undeveloped factors such as high technology in production, research and deveolopment activities, qualified employment to produce value-added products and the stagnation in growth. Although the factors affecting countries being caught in the middle income trap are similar according to their economic structure, the policies and strategies to be implemented to get out of the middle income trap differ according to the financial and political structure of the countries. In the light of this information, approaches to the definition and detection of the middle income trap are examined in this study. By examining the macroeconomic and sectoral data of the Turkish economy before and after 1980, it has been determined that our country is in the middle income trap. It has been determined that the factors affecting the Turkish economy's being caught in the trap are production with high technology level, human capital, competitive structure in foreign trade, research and deveolopment activities are not at a sufficient level, and the relevant factors are evaluated within the scope of development plans. It is aimed to guide the way out of the middle income trap by comparing foreign trade, technology level, research and deveolopment activities and strategic sector determinations of Turkey and high-income countries. Finally, a hierarchical classification of strategic policies has been made within the scope of Turkey 's exit from the middle income trap, and it has been concluded that it is possible for Turkey to get out of the middle income trap with strategic sector determination for exiting the trap and short and long term policy recommendations within the scope of incentive and expenditure policies, which are among the fiscal policy tools in the relevant sectors. has been reached.