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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

How Did British Colonial Education in Africa Becomea Reason for
Decolonization?
Çağrı Tuğrul Mart
Ishik University
tugrulbey@hotmail.com
Alpaslan Toker
International Burch University
atoker@ibu.edu.ba
Abstract: As a by-product of colonization, the colonizing nation implements its own
form of schooling within their colonies. Colonizing governments realize that they
gain strength not necessarily through physical control, but through mental control.
This mental control is implemented through a central intellectual location, the school
system. At the heart of this policy is the paternalist idea that the “backward”
undeveloped inhabitants of the colonized areas need to be educated and brought up to
the level of the superior culture and life-style of the colonizing power. Indigenous
people were made by brainwashing to discard their own cultures and embrace
Western cultures which were supposedly superior, a situation which resulted in a
culture of dependency, mental enslavement and a sense of inferiority. White
supremacy used education for its own sake so colonial education was a deliberate
policy to continue colonial rule. In African British colonies the misusage of education
became a major reason for decolonization.
Key Words: Colonial Education, Superiority, Decolonization

Introduction
One of the areas colonialism affected in Africa was education and language. Two scholars on colonial
education, Gail P. Kelly and Philip G. Altbach, help define the colonialism process as an attempt "to assist in the
consolidation of foreign rule". colonialism is a process that is an attempt to strip the colonized people away from
their indigenous learning structures and draw them toward the structures of the colonizers (Gail, Altbach 1984).
Colonial powers imposed their own education system and language on the local population. Everybody had
to learn the language of colonizers which was associated with modernity, sophistication and social status. In
almost all colonies the language of the colonial power was used as the language of administration. For this
reason, the education system needed to produce people who knew this language well. In many cases people
received their education in the metropolitan state, which offered better educational facilities and more exposure
to the language and culture of the colonial power.
Colonial education was fueled by a widely held belief that the “superior” white race of Europe should bring
civilization to the “less developed” people of color living on other continents. White supremacy manifests in the
social, economic, political, and cultural history of European expansion and the development of the New World.
White supremacy has negatively affected the lives of peoples of African descent throughout the world (Christian
2002: 188). What is worse; from a European point of view, colonial territory was singular: colonized land and
people all fell in the category of “other”. Africans were split up in such a way that those within the same
language groups were separated and forbidden to speak in their own languages. Africans were developing an
interest in Western-style literary education, the colonial government began to realize the necessity of training
Africans for service to the white man (Urch 1971: 250). Later the “superiority” and “inferiority” terms which
were occurred with the imperialist project of colonizers brought about “othering” category. Because they belong
to lower class the indigenous people were referred as “backward”.

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Colonial Education
Colonizers share the idea that education is important in facilitating the assimilation process. The ultimate
goal of colonial education might be deduced from the following statement by Thomas Babington Macaulay:
We must at present do our best to form a class who may be interpreters
between us and the millions whom we govern; a class of persons, Indian
in blood and color, but English in taste, in opinions, in morals, and in
intellect. To that class we may leave it to refine the vernacular dialects
of the country, to enrich those dialects with terms of science borrowed
from the Western nomenclature, and to render them by degrees fit vehicles
for conveying knowledge to the great mass of the population.
(CPCR 1999: 268)
This colonization process which started with the goal of colonizers’ providing a good education for
colonized people turned into a means of service for white people. White supremacy used education for its own
sake, and colonial education was a deliberate policy to continue colonial rule. African writers and abolitionists
such as Olaudah Equiano, Ottobah Cugano and Phyllis Wheatley, in their very different ways, articulated in print
the desire to be respected as human beings and their work served as rallying points for the antislavery movement.
Ngugi Wa Thiong'o a citizen of the once colonized Kenya, in his article “Decolonizing the Mind” displays
his anger toward the isolationist feelings colonial education causes. He writes:
The process annihilates people’s belief in their names, in their languages, in their
environment, in their heritage of struggle, in their unity, in their capacities and
ultimately in themselves. It makes them see their past as one wasteland of nonachievement and it makes them want to distance themselves from that wasteland. It
makes them want to identify with that which is furthest removed from themselves.
(Thiong’o 1981: 28)
White supremacy manifests in the social, economic, political, and cultural history of European expansion
and the development of the New World. White supremacy has negatively affected the lives of peoples of African
descent throughout the world. The European enslavement based on the economic plantation system led to a
global affront on African humanity. Negative effects of White supremacy and racism are ubiquitous in different
ways. With the birth of the New World, White supremacy was borne and where African descent reside it has left
cultural, and socioeconomic scars. White supremacy and cultural expansion of Europe are inextricably
interwoven from the 15th century to the present (Christian 2002: 180).
African-centered psychologists, such as Bobby Wright and Frances Cress Welsing focused on the
psychology of White supremacy. They attempted to more fully understand the illogical behavior and
inhumanness associated with White racism. Bobby Wright was particularly sincere in his analysis of collective
White European behavior in relation to peoples of color. Wright contended that White European behavior toward
Black people is similar to the psychopath. Welsing writes about the idea of Black inferiority. Both Wright and
Welsing approached White supremacy as a behavioral inadequacy.
Europeans who favored rapid Westernization of the African argued that old African values must be replaced.
The one great hope for progress in Africa, they felt, was the application of European knowledge, experience, and
skill. On the opposite side were colonial officials, educators, and non-educators concerned with the maintenance
of those traditions in African society. This controversy in education policy was especially evident in Kenya.
George Urch states in the article that missionary activity in Kenya dates back to the middle of the nineteenth
century. The forces of western civilization in the appearance of trade and Christian missions had access to the
area under the protection of the British flag (Urch 1971: 253).
Building and operating the railway in Kenya greatly increased the cost of administering the territory; the
British government sought ways to make the railway pay so white settlement began. When the white settlers

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arrived the prestige and power of the European grew. The mission’s educational objective was to expose
Africans to a superior culture. While the Africans were developing an interest in Western-style literary
education, the colonial government began to realize the necessity of training Africans for service to the white
man. The demand for skilled native labor by the white settlers and commercial leaders caused the colonial
administrators to reevaluate the educational program of the missions. The different thought over educational
goals arose between the government and the various mission groups. The conflict caused colonial officials to
realize the necessity of educating indigenous people and the importance of creating an over-all education
forward in a desired direction because a better education by white civilization would elevate the African to a
better standard of living (Urch 1971: 254).
It was apparent to the government that various missionary groups were continuing to use education as a
tool for expanding religious activities and enlarging their own sphere of influence (Urch 1971: 256). The early
1920s brought concern for the people of Africa from outside the world. The development of the “trustee”
concept aroused a strong feeling that colonial governments had a greater responsibility toward their subjects.
There was a growing recognition that the education of the indigenous population was the concern of the
controlling government (Urch 1971: 258). Thus, by 1925 the fundamental problems which faced education in
Kenya throughout the colonial period had been magnified to the point where concern was being shown by both
African and European (Urch 1971: 258). The government continued its criticism of mission education which
displayed more concern for religious training than meeting the social and economic needs of its parishioners; the
missionaries were frustrated when their newly educated students left the tribal compound to seek work in the fast
developing urban area. So the aim of the education by missionaries was to propagate Christianity and White
supremacy tried to use the education for its own sake in Kenya. Colonial government used education to train
Africans for service to the white man.
The missions established schools in Africa long before the British Government took systematic interest in
education. British interest in the control of education policy in Africa in the colonial empire was of short
duration, which started in the early 1920s and waned by the 1950s. In 1950s various territories in Africa assumed
responsibility for the conduct of their own internal affairs as a prelude to independence. But British education
system received a great deal of criticism. Much of the criticism focused on the concept of adaptation and the
education system kept indigenous people in their place. Other criticisms were about the slow pace and scope of
educational development (Whitehead 2005: 444).
Schooling extended to only a minority of children in most colonies and most of that was confined to
primary stage. Colonial administration deliberately neglected education for both political and economic reasons.
British Government was accused of not extending the benefits of European civilization; furthermore, the British
were accused of deliberately pursuing forms of cultural and ideological domination to destroy the cultures of
African people (Whitehead 2005: 447).
The most scholarly critic of British colonial education policy was Trevor Coombe whose study based on
colonial administration’s limiting the provision of secondary education for Africans. As a result he states, when
independence was achieved the supply of educated manpower was utterly inadequate to run the country. In his
doctoral study of education policy in the Gambia J.C.E. Greig claimed that there was no central policy only
general guidelines were worked.
Jason A. McGarvey in his article “Conquest of the Mind” writes about a Tanzanian man who had his
master and Ph.D. degrees. McGarvey in the article writes during colonization process real life experiences of this
Tanzanian man whose name is Semali. Semali says:
Education is slavery of the mind. I was born on the slopes of Mount Kilimanjaro in
a village called Chaggaland. My people, the Chagga, are an indigenous tribe of
Tanzania. While I was growing up in what was then called Tanganyika, we had
already been under colonization for nearly a century – first by the Germans, and
then the British after the first World War. The colonial school I attended didn't
teach me to be a member of Chagga society. Although I had a certain knowledge
system as a member of the village, I read, wrote, and spoke things at school that
didn't fit into village life. I always wore two different hats. I developed this doubleconsciousness so well that I didn't realize it. In order for the colonizers to exploit
the Chagga for labor they first needed to establish themselves as the authority.
Because authority traditionally rested in the hands of the Chagga elders, the

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colonizers needed to begin dismantling Chagga cultural traditions. The main tool
for doing this was the colonial school. The colonial school was set up to instill the
values and practices of the colonizers on the indigenous people so that the
indigenous people would open up their land and their minds to market economies.
In order to establish control over these economies, the colonizers had to first
establish control over the socialization of the people. As a result, the colonial
schools began socializing the children in ways that conflicted with their traditions.
The children began to lose faith and respect for the elders as authority figures, and
began to see the colonizers as the authority…
(McGarvey 1997: 22)

Colonial Education Became a Reason for Decolonization
Colonizers believed that their whole culture was more highly advanced, and they ignored or swept aside
language and customs of colonized people. Colonialism changes its guise, diversity of forms and methods for the
subjugation of dependent countries, especially in the era of imperialism, when colonialism in its "classic forms"
of direct political rule of one country over another recedes more and more into the background, while other
means for the economic subjugation of weaker countries by industrial powers come to the fore. Native people
were afflicted by the impositions of colonial power and misusage of education by colonizers. Colonization and
colonial education have brought about these issues “superiority”, “inferiority”, “other”, and “backward” and
these terms used for native people led to decolonization.
Decolonization is the act of reversing the process of colonization in other words attaining independence.
Through decolonization process African colonized people granted their independence. Colonizers thought they
were developed and well educated. They thought their level of education and life-style were high so they
referred the colonized people as “the peoples not yet able to stand by themselves under the strenuous conditions
of the modern world’ and the ‘advanced nations”. These superiority and inferiority issues received some
criticism from the indigenous people. The colonial power credibility was challenged, colonized people began to
lose faith and respect for colonizers because colonizers despised their culture and referred them as “inferior and
backward”. Some local writers such as Chinua Achebe in “Things Fall Apart”, M.G.Vassanji “The In-Between
World of Vikram Lall”, and Austin Clarke in “The Polished Hoe” started to complain or criticize about this
“othering” or “superiority, inferiority” terms.

Conclusion
Colonization is taking control of another nation or territory and colonial education is colonizers’
implementing their own form of schooling within their colonies. Poka Laenui in his study “Indigenous Voices”
defines the process of colonization and colonial education through some steps. Firstly, Denial and Withdrawal:
When a colonial people first come upon an indigenous people, the colonial strangers will immediately look upon
the indigenous as a people without culture, no moral values, nothing of any social value to merit kind comment.
Thus, the colonial people deny the very existence of a culture of any merit among the indigenous people.
Secondly, Destruction/Eradication: The colonizers physically destroy and attempt to eradicate all physical
representations of the symbols of indigenous cultures. This may include the burning of their art, their tablets,
their god images, the destruction of their sacred sites. Thirdly, Denigration/Belittlement/Insult: As colonization
takes a stronger hold, the new systems which are created within indigenous societies, such as churches, colonial
style health delivery systems, and new legal institutions, will all join to denigrate, belittle, and insult any
continuing practice of the indigenous culture (Laenui 1999).

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References
Adhikari, Mohamed. “British Colonialism and Its Opponents” Journal of African History, 42.3 (2001): -523-25
Chris, Bunting. “A Tale of a Language Lost and Then Found” Times Higher Education, 1539 (2002): 23-26
Christian, Mark. “An African-Centered Perspective on White Supremacy” Journal of Black Studies, 33.2
(2002): -179-98
Clive, Whitehead. “The Historiography of British Imperial Education Policy” History of Education, 34.4
(2005): -441-54
Geoffrey, Wheatcroft. “The Anguish of Africa” New Republic, 190.1 (1984): 18-23
Gailey, A. Harry. “The Turning Point in Africa” American Historical Association, 88.2 (1983): -445-47
Goodman, Joyce, and Jane Martin. Gender, Colonialism and Education. London: Routledge Publishing, 2005
Hyam, Ronald. Britain's Declining Empire: The Road to Decolonization,1918-1968.NewYork: Cambridge
University Press, 2007
Johnston, Harry Hamilton. A History of the Colonization of Africa by Alien Races.
New York: BiblioBazaar Publishing, 2009
Kelly, Gail P. and Philip G. Altbach. "The Four Faces of Colonialism."1984 3 Jan. 2010
&lt;http://www.englishmemory.edu/Bahri/Education.html&gt;.
Khanna, Raniana. Colonial Rescriptings Dark Continents: Psychoanalysis and Colonialism. London Duke
University Press, 2003
Omolewa, Micheal. “The History of Colonialism in Africa” Journal of African American History, 94.2 (2009): 248-52
Panikkar, K.N. Colonialism, Culture, And Resistance. London: Oxford University Press, 2006
Pennycook, Alast. English and the Discourses of Colonialism. London: Routledge Publishing, 1998
Shillington, Kevin. History of Africa. New York: Palgrave Macmillan Publishing, 2005
Smith, L.Young, and Nima Poovaya. “Culture, Resistance, Freedom” Publisher Routledge, 36.1 (2007), -133-37
Southard, John. “Colonial Education.” Fall 1997 2 Jan. 2010
&lt;http://www.englishmemory.edu/Bahri/Education.html&gt;.
Susan, Van Zyk. “The Other and Other Others: Post-colonialism, Psychoanalysis and The South African
Question” American Imago, 55.1 (1998), 77-98
Urch, E. George. “Education and Colonialism in Kenya” History of Education Quarterly, 11.3 (1971), -249-64
White, Nicholas. Decolonization: The British Experience Since 1945. London: Longman Publishing, 1999

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Toker, Alpaslan</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Relationship Between Economic Growth And Tax Revenue: Bounds
Testing
Mehmet MERCAN

Adnan Menderes Üniversitesi
mmercan@adu.edu.tr
Ġsmet GÖÇER

Adnan Menderes Üniversitesi
igocer@adu.edu.tr
ġahin BULUT

Adnan Menderes Üniversitesi
sbulut@adu.edu.tr
M. Metin DAM

Adnan Menderes Üniversitesi
metindam@hotmail.com

Abstract : Taxes are one of the most important sources of finance; moreover they are able to have
various impacts on chief indicators of economy. However, taxes may have negative as well as
positive impacts. The relationship between economic growth and tax revenue in Turkish economy
has been studied in this survey. In the survey, the existence of relationship between series and cointegration as well as long and short term links have been studied through ARDL bounds testing
and it was observed that series moved together in the long term.
In the long term analysis, a relationship between indirect and direct taxes with economic growth
has a meaningful and positive relationship. It was found out that direct taxes effect bigger than
indirect taxes.
In the short term analysis, the coefficient of vector error correction model was signed negative and
statistically meaningful. This means that the deviation, which took place in the short term between
series which moved together in the long term, has disappeared and series came close to each other.
Again, both types of taxes in the analysis of short-term growth is positive and statistically
significant influenced, besides in the short term analysis it was observed that indirect taxes effect
bigger than direct taxes.
Key words: Economic Growth, Indirect and direct taxes revenue, Bounds testing.
JEL Sınıflandırması: E62, H21, H27, O49.

1. Introduction
Tax is the transfer of the sources without any provision and under the rules of political force from the
economical deparments of the goverment in order to provide the expenses of the puclic facilities (Temiz, 2008).
Throughout the history countries have provided the income they need to act their basic functions by collecting
taxes.At the same time tax policy is used for the economic and social purposes like allocation for sources through
increasing internal savings,increasing economic growth of the country, providing price stability and controling the
production and consumption level indirectly.
Tax incomes are one of the most essential sources to administer the public facilities.In order to provide
social security services,state investments and the other public expenses the goverment will either collect taxes or get
into the debt. Getting into debt is the last way to prefer for the countries.
Taxes in an economic system may effect the amount of the goods and services produced and the income and
prices of production factors directly or indirectly (Yılmaz, 1996). The taxes which have the capacity to effect directly

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
people‘s decisions to use for the labour, savings,investment and source can be effective on the economic growth via
different channels.Especially for the developing economies analysing the relationship between the taxes that are the
primary source for the public and the growth would contribute to form tax policies and improve some applications
(Gül ve Kenar, 2009).Especially in developing countries today taxation policy which is an instrument for the
financial policy is a very effective financial instrument (Eker vd., 1996:32).
We can categorize the taxes in use today in three groups according to the characters of the event that
caused for their use: The taxes about the incomes including income taxes, corporation taxes,etc;the taxes about
expenses including income taxes based upon expenses,transaction and sale taxes and custom taxes,etc;the taxes
about the propertiess and the transfer of the properties including general property taxes,real estate taxes,capital
taxes,motor vehicle taxes (Temiz,2008).
Also taxes can be categorized in some other forms as in rem-monetary,spesific-advolorem and directindirect taxes (Bulutoğlu,1970). Furthermore it is also common to categorize the taxes in two big classes as direct or
indirect. While analysing the reflection of the taxes on the economic growth in recent studies, especially direct and
indirect identification is used.This identification is also very essential to form good taxation systems.
Direct taxes are the taxes collected from the individuals and the corporations according to their income
level whose tax payer and payer is the same. In these taxes there is no possibility for the tax payers to reflect his tax
obligation to the others. Income taxes that the goverment collect from the factor incomes (interest, fee, profit,
annuity) and taxes on the properties and corporation taxes are the example for the direct taxes (Turan,2008).
On the other hand indirect taxes are the taxes resulted from the use of goods and services.Everybody
using the taxable goods and services pay the tax at the same percentage however income they have.In these taxes the
tax payer and its payer is different. The Value Added Tax and the excies tax are in the group of indirect taxes.
(Temiz,2008).
The situation desired in the taxation policies is to provide most of the tax collection by the direct
taxes.These taxes mostly support the economic growth. However, indirect taxes can contribute to the economic
growth like direct taxes if they are used suitable for economic structure of the country,too. Economic growth
expresses the increase of the real national income in the length of time.In developed or especially developing
countries economic growth has a special importance. There are many theories in this issue.Economic growth theories
are analysed in terms of their factors,qualities and characters that have effects on the economic growth. In this
context economic growth theories mostly major on the matters of capital accumulation,technical improvement and
population increase.In an economy there are two commonly approved approaches about the economic growth rate.
These are Harrod-Domar and Neo-classic Harrod-Domar growth model founded by making Keynesyen balance
model dinamic and based on Keynesyen hypothesis actracted many attentions in the post-war years. Harrod-Domar
model suggests the idea that growth rate is determined by the capital accumulation.In this case it can be possible for
the goverment to realize the target growth rate by intervening the economy via the financial policy instruments or to
remove the possible drifts on the long term growth rate.In this context the government on one hand has a great role
to realize the economic growth with the public expenses,on the other hand it can use the taxation policy as an
instrument for an increase in the total savings quantity of the economy.In this case it will be possible to increase the
public savings,to encourage private investments and to resist against the structural instabilities which are derived
from the economic growth and may cause a danger in growth.(Demircan, 2003).
At the same time indirect taxes can help to reduce the consumption and encourage the savings in the
economy by effecting the relative prices.So an indirect tax on the consumption goods can reduce the expenses on
these goods by increasing the consumption cost and it can help these sources to be directed to the investments.
(Temiz,2008).
In this study the relationship between the indirect and direct tax incomes and the economic growth in
Turkey is analysed with the limit test approach by the help of the annual information between 1924 and 2009
years.In the study,in second section following the introduction part,the sructure of the taxation in Turkey is analysed
and third section including a summary of literature about the subject follows. Method and information set are in the
fourth,analyse and empiric findings are in the fifith section.The study ends with a short conclusion and evaluation
part.

2. Taxation Applications In Turkey
While in developed countries especially rate of the direct taxes are high in tax incomes,in developing
countries indirect taxes are high.In developed countries avarage %26 of total taxes , in developing countries more
than %50 of taxes is composed of indirect taxes. The main reason for that is the application of indirect taxes is easier
in spite of the difficulties in the application of the taxes collected on the income, the individuals are unaware about

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these taxes and they response less to the tax implementors.The high rate of the indirect taxes in developing countries
is closely related to the economic growth.Since the taxation systems are not exactly efficient in these countries,
indirect taxes are emphasized.(Temiz,2008).
When the improvement of indirect and direct taxes are analysed in Turkey a great and fast change stand out
in the composition of the direct and indirect taxes in total tax incomes especially post-1980. While the indirect tax
rate is %36 in 1980,this rate went up to % 64 when we were in 2009. It can be said that the taxes collected from
goods and services like value added tax and excise tax have an essential role in total tax incomes in the increase of
indirect taxes.
Especially after the economic crisis in 1994 in Turkey the rate of indirect taxes in total taxes increased an
this rate rised until %69.(Graphic 1).After economic crisis and The Marmara Earthquake in 1999 some temporary
taxes became permanent and this was effective on this rise.
While 71 Billion TL of tax (%36)of the total 196 Billion TL of tax collected in 2009 in Turkey is consisted
of direct taxes, the rest of 125 Billions of TL(%64)of tax is consisted of indirect taxes. This shows we are very far
away from the ideal porsion rate between direct and indirect taxes.
Graphic: 1 The Portion of Direct and Indirect Taxes in Tax Incomes in Turkey
80
70
60
50

Direct Dolaysız
Tax

40

Vergi

Dolaylı
İndirect
Tax

30

Vergi

20
10
0
Source: Income Directory Management (GĠB).
1923 1930 1937 1944 1951 1958 1965 1972 1979 1986 1993 2000 2007

One important point is that the rate of the tax incomes of the countries in the rate of gross national product.While this
rate passes %40 in developed countries,it is %20 in developing countries.(Graphic 2). This rate is essential in
showing how much public expenses are financed by the tax incomes and whether the countries need external loans or
not.
Graphic2: The Rate of Tax Incomes in the Rate of Gross National Product (%)
45
40
35

OECD
OECD
Total Toplam

30

OECD Amerika
OECD
OECD
USA Pasifik

25

OECD Avrupa

20

OECD
ABPasific
15

15

Türkiye

10

OECD Europe

5

EU 15

19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07

0

Turkey

Source: OECD, Revenue Statistics of OECD Member Countries, Paris,2009.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

3. Literature
There is a wide literature on the subject of the effects of the direct and indirect taxes on long term growth.In
accordance with the Neo-classic growth model Solow (1956) supposes that taxation has no effect on long term
growth. Most of the studies in accordance with the Internal growing model result direct and indirect taxes have a
negative effect on the long term growth. It is accepted that indirect taxes have more effects on the gowth than the
direct taxes.
Marsden (1983),wanted to stress that as the tax rates increase it causes low growth. Skinner (1987), reached
a similar result by using the rates of personal and institutional income taxes.
King ve Rebelo (1990), observed about % 2 of decrease in growth per year when tax rates increased %
10.As a result in the study, he stated that in long term income taxes have a decreasing effect on the individual
earnings,on the other hand Mendoza vd. (1997) stated that in theory it can be estimated that the changes in income
taxes affect the investments and the growth but in practise the tax policy and the changes on composition of direct
and indirect taxes is an uneffective instrument to effect the economical growth in long term.
Easterly ve Rebelo (1992) who used an information set about 1970-1988 years for many developing countries
concluded that two measurements about marginal income rates have a negative but unimportant effect on the
individual consumption growth .
Plosser (1992) stated that there is a negative relationship between avarage individual real growing rates and
avarage tax rates on income and profits in OECD countries,while William Easterley ve Sergio Robelo (1993) stated
that this negative relationship disappeared when the begining income stage was checked. Writers also stated that the
countries applying low tax rates was more succesful in reaching a high growing speed than the countries applying
high tax rates.
Roubini and Milesi-Feretti (1994) searched the effects of income taxes in open economy on the economic
growth in accordence with the internal growing models.They especially stressed on the effects of the taxation of the
income on the pysical capital saving decision of private sector and increase of the allocations via individual capital
savings.Writers concluded that allocation and pysical taxes have negative effects on the growth.
In an another study Roubini and Milesi-Feretti (1995) searched the effects of income and consumption taxes
in the process based on the pysical and individual capital savings. The results showed that in general taxation of
factor incomes(individual and pysical capital) had decreasing effects on the growth.The effect of consumption taxes
on the growth is determined to change according to the supply of labour flexibility and consequently free time
preferances.
Razin and Yuen (1995) searched the effects of taxation of capital income on the long term growth in
accordence with the internal growing model which is open to the international capital movements and the population
increase is considered as an internal variable. The results of the study containing G7 countries showed that in the
case of whole capital movement, cuts on the capital taxes would cause a decrease on the individual income rates and
growth.
Engen ve Skinner (1992) who used an information set including 1970-1985 years about 107 countries
stated that both expenses of the state and the taxation have strong and negative effects on the growth,it was estimated
a 1.4 percent point decrease on long term growth by increasing the budget with 10 percent in balance on the expenses
of the state and the taxation,the administritive structure of the tax system was also important on the evaluation of the
effect of the taxation on the production , Ram‘s results were supported by the instrumental variables approach.
Engen ve Skinner (1996) searhed the effects of a general taxation cut under the control of three approach
on the long term growth.These approaches consists of a micro model containing investigation of historical time
series for the USA, a stage regresion analysis, labour supply,investment demand and productivity boost. The result
of the study show that taxation had a mid-staged effect on the long term growth.
Leibfritz and the others (1997) stated that about a 10 percent point increase on the tax rates in the past 35
years could have decreased the OECD annual growth rates about ½ percent point,however this calculation had some
defects to evaluate the effects of taxes on the economy so it was necessary to support these calculations with an
another approach.
Kneller and the others (1999) who studied weather the proofs in OECD countries are coherent with the
estimates of the endogenic growing models anticipating that puclic expenses and the structure of the taxes could
effect the stable growth rate by using an information set including 1970 and 1995 years about 22 OECD countries
reached a fact that non-deforming taxation didn‘t decrease the growth but deforming taxation decreased the growth,
productive state expenses increased the growth but non-productive expenses didn‘t increased the growth.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Anastassiou and Dritsaki (2005)searched for the Greece economy the tax incomes,direct marginal tax rates
and the relationship between savings-income rate and growth rate.In the study to search for the long term realtions
Johansen koentegrasyon method,fort he short term relations Granger causility test was used.The proofs showed the
existence of a long term relation between the variations in the study. In term of short term relations, it was found a
one way casual relation from direct marginal tax rates and tax incomes to the growth.
Durkaya ve Ceylan (2006) analised the realtionship between 1980–2004 years tax incomes and economical
growth with Engle-Granger integration test and casuality test and figured out that there was a double sided realtion
between direct taxes and growth,however there was no realtionship between indirect taxes and the growth. It was
stated that if the tax increases to increase the tax incomes had been made upon the indirect taxes,the negative effect
of the tax increase on the growth would have been decreased. It was also stated that the change of the current tax
items from direct taxes to indirect taxes would make the same effect.
In his study Demircan(2003)stated that there was a close relationship betweeen groth and economy policies
and a growth and development in the country ecenomy was closely related with the income tax decreases. He stated
that to work was important and the tax decreases which increase the production and national income would directly
increase the gross national product rate,and also if there was a politic and economic stability in the state,the changes
to reconstruct in tax conduction and mechanisms for taxing encouragement had positive effects on the growth and
development.Also he stated that the direct taxes taken on expenses were both for providing the equality in taxes and
they affected indirectly economic growth and development in terms of encouraging the savings by reducing the
luxurious consumptions.

4. Data And Methods
This survey covers 1924 and 2009. 3 variables have been used and all variables have been calculated in
percentages. The variable vektör of the survey is: Yt=[DLIt, DSZt]. Y stands for Gross National Product (GNP), DLI
indirect tax income and DSZ direct tax income. All data have been taken from the website of the Directorship of
Income(www.gib.gov.tr).
In this survey boundary test approach which was developed by Pesaran vd.(2001) has been used in order to
study the effect of tax revenue over economic growth. This method is considered to be more usable when comperad
to cointegration method developed by Engle-Granger. Series have to be stable in the first differnce in the EngleGranger and Johansen. Series can be in different stability levels in ARDL method. Another advantage of boundary
test approach is that analysis can be made with only a few data. (Narayan and narayan, 2004:25) More over as the
regresive variables included in analysis. The level and regressive values of independed veriables can be observed on
depended variables. In boundary test apprach firstly whether series move together in long-term is analysized by
means of ARDL cointegration method. Ġf there is conĢntegration relationship betwen series the coefficient and
statistic of regression carried out with this serries will be meaningfull and reliable. Ġf relationship can be pointed out
whit be serries lon an short term analysis are held by means of ARDL method.

5. Analysis And Empirical Findings
5.1. ADF Unit Root Test
If time serries is not stable, medyan, variance and covariance changeble in time. Shocks take place in a term
can effect the others and it becomes permanent. The analysis carried out in this case includs fake regression and F
and t statistics loos their meaning (Gujarati, 1999:2.712).
The stability levels of serries and unitroot test have been studied with ADF test.
DF test is carried out based on three regression equation (Dickey and Fuller, 1979).
Simple position:

Yt  Yt 1  ut

(1)

Intercept:

Yt   0  Yt 1  u

(2)

Trend and intercept:

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Yt   0  1 t  Yt 1  ut

(3)

As a result of this tests the DF statistic been compared Mac Kinnon crtitical values zero hypotesis is tested against
the lternative hypotesis. Zero hypotesis showes that serries is not stable alternative hypotesis. Ġf error correction term
is autocorrelated equation (3) is regulated as:
m

Y   0  1 t  Yt 1  i  Yt i ut

(4)

i 1

Here m stands for regression length and  stands for difference operator. Regression number depends on obtaining
model without autocorrelation. A test which is carried out this way is called ADF test in short. Tests results obtained
accordingly are shown in Table 1.
Table 1: ADF Test Results Expanded for Dickey-Fuller Variables (ADF)
Level Values
1. Difference
Variables

ADF sts..

Mac Kinnon %1
test values

ADF sts.

Mac Kinnon %1
test values

G
-1,83
-3,51
-8,40[2]
-3,51
DLI
-1,78
-3,52
-3,55[10]
-3,52
DSZ
-2,41
-3,51
-9,17[2]
-3,51
Note:The values in [ ] points out teh number. By taking the lenght which Akaike is the lowest. Mac Kinnon test
values pointed out without trend and intercept test values.
In the Table 1 it is observed that all series I(1) when their first differences are taken.
5.2. Co-Integration Test
The level values of many macroeconomic variables are not stable. If there is a co-integration relationship
between series in other words if series move together in the long term, a fake regretion trouble will not be faced in an
analysis to be carried out with level values(Pesaran etc, 2001:290;Gujarati 1999). However, the dynamic behaviors
of variables moving together in the long term cause some deviations in the balance equation(Enders, 1996:151).
This is one of the basic characteristic of co-integration variables and plays an important part in the short term
dynamic. The dynamic model appearing along with this process is called error correction model(Enders, 1995: 365).
An unrestricted error correction model is setup so that boundary test approach can be applied. (unrestricted
error correction model: UECM) This model can be applied to our survey as fallows:
m

m

i 1

i 0

m

Gt   0   1i Gt i   2i DLIt i   3i DSZt i  4Gt 1 
i 0

 5 DLIt 1   6 DSZt 1  ut

(5)

Here, m; stands for optimum length, ∆ stands for difference operator, ut stands for error correction term,
those which are given with other letter abbreviation stands fort he meanings in variable definitions. In this survey
optimum lenght has been determined by means of Akaike Criterion. According to Kamas ve Joyce (1993)
There musn‘t be restpective connection error terns of optimum laght lend so that the test can give healthy
result. If there is autcorolation in the lag lenght which akaike criteria lowest. One has to next lag.
The test result of lag lenght are presented in table 2. Maksimum lag lenght is 4 since the data in this survey
is annual.

m
1*
2
3
4

Table 2: The lag length is point out for boundary test
AIC
LM Test
8,217
0,69
8,295
0,47
8,246
0,04
8,287
0,19

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
The optiumum lag length determined as a one in the table 2.In this lag length hasn‘t aoutocorolation.
After lag length determined it passed testing process cointegration relation ship between variables.
In boundary cointegration relationship between values is made by mines of testing ziro hypotesis.
(H0:α4=α5=α6=0) Zero hypotesis accept or reject is determinated with F test.
Calculate value contrasted table conpered and contrast min and max value in Pesseran etc 2001 table. In the
fisrt case if calculated F statistic value lover than min critic value. It is decided that there is coengration relation
between series. In the second case if calculated F statistic value in between max and min critice value no definite
commend can be made. In this case must be tried alternative cointegration methots. Finaly f calculated F statistic
value bigger than table max critic it is decidet that there is cointegration relationship between serious.
In this study unrestricted error correction model is estimate to lag length and calculated F statistic. Results
given in table 3. For testing H0 calculated F statistic value compared with critic value which taken Pesaran etc 2001
in table 3. This critic values given fort 2 independed variable and mining full %1.
Table 3: Boundary Test Results
k
F Calculated
Min
Max
2
14,20
5,15
6,36
Note: k stands for variable number. Critical values are extracted from Table CI (iii) in Pesaran etc.
It is observed that calculated F statistics is higher than utmost critical value. In this case H0 hypothesis is
denied and it is concluded that there is a co-integration relationship between variables. Since the existence of cointegration relationship between series is remarked, ARDL models started to be estimated to search the long and
short term relationships between variables.
5.3 Long Term Analysis
ARDL model which is used in order to analyse long term relations is formulated as:
m

n

p

i 1

i 0

i 0

Gt   0  1iGt i  2i DLIt i  3i DSZt i  ut

(6)

Here m, n, p is length and determined with AIC. This transaction has been carried out with the method that Kamas
and Joyce(1993) proposed in their causality analyses so as to determine length. Therefore; first of all, regression
according to dependent variables‘ own regressive values is made and the length of the whit out autocorelation model
which gives the lowest AIC value. Then, regression models were formed by keeping the identified length of the
dependent variable stable and all possible regressions of foreign direct investment variable which is the first
independent variable and the regressive number of independent variables was found by taking AIC values into
consideration. Optimum regression number was obtained by repeating similar transactions for other variables. As a
result of the transaction carried out, it was decided that ARDL(4,1,4) was the long term ARDL model to be
estimated and results are presented in table 4.
The Lag Length determine for The Long Term Boundary Test
m
AIC
LM
n
AIC
LM
p
AIC
(G)
Test
(DLI)
Test
(DSZ)
0
0
8,710 0,00
0
8,382
1
8,889 0,83
1
8,262
1*
8,600 0,60
2
8,925 0,11
2
8,621 0,94
2
8,286
3
8,900 0,17
3
8,643 0,14
3
8,309
4
8,662 0,23
4*
8,875 0,99
4*
8,244

LM Test
0,00
0,93
0,61
0,01
0,25

The estimate results of long term ARDL(4,1,4) and long term coefficients calculated based on the results mentioned
are available in table 5.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Table 5: The results of Estimated ARDL (4,1,4) Model and The Long Term Coefficients
Variables
Coefficient
t-statistical
c
0.980880
0.400290
Gt-1
-0.003891
-0.027863
Gt-2
-0.092723
-0.723156
Gt-3
-0.004752
-0.042695
Gt-4
-0.122843
-1.233238
DLIt
0.323505
3.733284
DLIt-1
0.131856
1.405338
DSZt
0.276303
4.966621
DSZt-1
0.208335
3.236775
DSZt-2
-0.025281
-0.367004
DSZt-3
0.016428
0.258477
DSZt-4
0.156683
2.534998
The Long Term Coefficient
DLI
0,371963
4,251
DSZ
0,461113
4,094
c
0,801235
0,401
Diagnosis Tests
R2=0.82
2BGAB(2 )=1,588(0.21)
2
2WDV=0,309(0.99)
R =0.79
F ist.=29,58(0,00)
2JBN=24,78(0.00)
DW=1,84
2RRMKH(1)=0,13(0.71)
Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values.
Taking the results in table 5 into consideration, both direct and indirect taxes increase economic growth and
affect it statistically meaningfully.
Dolaysız vergilerin büyümeyi, dolaylı vergilerden daha çok arttırdığı görülmektedir.
5.4. Kısa Dönem Analizi
Short term relation between variables again investigated by means of ARDL Error Correction Model based
on boundary test approach. ARDL model which is used in order to analyse short term relations is formulated as:
m

n

p

i 1

i 0

i 0

Gt   0  1ECt 1   2i Gt i  3i DLIt i  2i DSZt i  ut (7)
Here ECt-1 is error correction terms and it stands for one term lagged of error terms series which it is
obtained from long term relationship. Coefficient for this variable is point out duration of sort term deviation. If this
sign of coefficient is negative, deviations happen in short term between series is convergences to long term balance
value. If this sign of coefficient is positive, not convergences to long term balance value.
In this model lag length of veriables determineted just like long term. As a result of the transaction carried
out, it was decided that ARDL(5.1.0.0.0) was the short term ARDL model to be estimated and results are presented
in Table 6.
Table 6: Determination of Lag Length for short Term Boundary Test
m
AIC
LM
n
AIC
LM
p
AIC
(∆G)
Testi
(∆DLI)
Testi
(∆DSZ)
0
0
8,893 0,28
0
8,633
1
9,002 0,58
1
8,790 0,12
1
8,422
2
8,939 0,33
2
8,428
2*
8,745 0,44
3
8,769 0,05
3
8,413
3*
8,912 0,77
4
8,927 0,31
4
8,783 0,02
4*
8,271

633

LM
Testi
0,05
0,01
0,41
0,003
0,50

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Tablo 6‘da da görüldüğü üzere, tahmin edilecek kısa dönem ARDL modelinin ARDL(3,2,4) modeli olduğu sonucuna
ulaĢılmıĢtır. ARDL(3,2,4) modeli tahmin edilmiĢ ve kısa dönem tahmin sonuçları Tablo 7‘de verilmiĢtir.
Table 7: The Results of ARDL (3.2.4) Model
DeğiĢken
Katsayı
t-istatistiği
c
-0.100249
-0.064078
0.043531
0.212927
Gt-1
-0.030741
-0.191601
Gt-2
0.009492
0.079344
Gt-3
DLIt
0.292074
3.742568
0.100524
0.937896
DLIt-1
-0.033611
-0.398041
DLIt-2
DSZt
0.282694
5.472546
0.227042
2.792811
DSZt-1
-0.018289
-0.187475
DSZt-2
0.038494
0.497487
DSZt-3
DSZt-4
0.187336
3.517646
ECt-1
-0.946504
-3.807904
Tanısal Testler
R2=0,64
2BGAB(2 )=0,94(0,39)
2WDV=0,31(0,99)
R 2 =0,58
DW=1,99
2JBN=24,65(0,00)
F=10,42(0,00)
2RRMKH(1)=4,76(0,03)
Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values
Coefficient of ECt-1 (error correction terms) is -0,72 in Table 7. This coefficient is negative and meaningful
like expected. If coefficient‘s signs of error correction terms is negative, model is convergences to long term balance
level.
If this sign of coefficient is negative, deviations happen in short term between series is convergences to long
term balance value. If this sign of coefficient is positive, not convergences to long term balance value (Narayan ve
Smyth 2006). Therefore error correction of model is works. Although capital movements impact on economic
growth, like long term effect, is positive and according with theoritical expectation, statistically insignificant.
Tablo 7‘deki sonuçlar incelendiğinde; hata düzeltme teriminin (EC) katsayısı -0,94 ve t istatistiği anlamlı
çıkmıĢtır. Bu katsayı beklenildiği gibi negatif ve istatistikî olarak anlamlıdır. Dolayısıyla modelin hata düzeltme
terimi çalıĢmaktadır. Yani, uzun dönemde birlikte hareket eden seriler arasında kısa dönemde meydana gelen
sapmalar ortadan kalkmakta ve seriler tekrar uzun dönem denge iliĢkisine yaklaĢmaktadırlar. Dolaylı ve dolaysız
vergiler, cari dönemde de gecikmeli dönemlerde de büyümeyi arttırıcı yönde ve istatistikî olarak anlamlı düzeyde
etkilemektedir. Bu sonuçlar beklentilerimize ve iktisat teorisine uygundur. Dolaylı vergilerin büyümeyi dolaysız
vergilerden az da olsa daha çok etkilediği görülmektedir.

Result And Evaluation
In this study, from the declaration of Republic to today‘s Turkey, the link between the tax income and the
economical development is analysis in border test method.
To understand whether tax income varieties have different effect on development, direct indirect taxes were
analysied separately.
In the cooperation analysis, it is seen that there is a co ordination between the direct and indirect income and
economical development. That is, these series have to movement accordingly. So, it is though that the recreation
analysis administered among the series shold give us reasonable results.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

In long term analysis, it is seen that both the direct and indirect tax effect the development positively. In the
result of long term analysis, it is seen that indirect taxes increase the economical development more than the direct
taxes. This result is more suitable for our economical thought and expectations.
In the short term analysis, the extra valve of correcting error term was seen negative and statically
acceptable. This the correction of the model is working. It can be estimated that there is a balance in the long term
series and the mis direction can be compensated in long term values.
The direct and indirect taxes in the monetary term effect the development considerably. These results are
suitable for our economical theory. It is seen that the direct taxes effect the development slightly more than the
indirect taxes. This is little different from our economical literature.
As seen from this study, the taxing policy, one of the most important part of economical policy, if used in a
suitable condition, is one of the major means of development.
In order to see the Country developing in the long term, it should be better to emphasize on the indirect
taxes instead of direct taxes. Because there is on unsuitable part of direct taxes for the economy. To decrease the
V.A.T Value Added Tax in the common consuming goods will enable the low and middle-income society to have
and consume more properties.
This will also decrease tha gap between classes, decrease the clashes among classes. Ġt will also help to
balance the income and increase the welfare of the country.

References
Anastassiou, T. ve Dritsaki, C. (2005), ―Tax Revenues and Economic Growth: An Emprical Investigation for Greece Using
Causality Analysis‖, Journal of Social Sciences 2 s. 99-104.
Bulutoğlu, Kenan (1970); Türk Vergi Sistemi, 3. Baskı, Ġstanbul, s. 341.
Demircan, Esra S. (2003), ―Vergilendirmenin Ekonomik Büyüme ve Kalkınmaya Etkisi‖, Erciyes Üniversitesi Ġktisadi ve Ġdari
Bilimler Fakültesi Dergisi, Sayı: 21, Temmuz- Aralık s.97-116.
Durkaya, M. ve Ceylan, S. (2006),―Vergi Gelirleri ve Ekonomik Büyüme‖, Maliye Dergisi, Sayı: 50 s.79-87.
Dickey, D. and Fuller, W. A. (1979), ―Distribution of the Estimates for Autoregressive Time Series With a Unit Root‖, Journal of
the American Statistical Association , 74 s. 427-431.
Eker, A., Altay, A. ve M. Sakal, (1996), Maliye Politikası, Takav Matbaacılık, Ġzmir.
Enders, W. (1995), Applied Econometric Time Series, 1 rd edition, Wiley, New York.
Enders, W. (1996), Rats Handbook for Econometric Time Series, John Willey and Song Inc.
Engle, R. and Granger, C. W. (1987),―Co-Integration and Error Correction: Represention, estimation and Testing‖,
Econometrica, 55(2) s. 251 – 276.
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1.Uluslararası Davraz Kongresi, 24-27 Eylül, Süleyman Demirel Üniversitesi, Isparta.
Kamas, L. and Joyce, J. P.(1993), ―Money, Income and Prices Under Fixed Exchange Rates: Evidence from Causality Tests and
VARs‖, Journal of Macroeconomics, 15(4) s. 747-768.
King R. G. ve Rebelo S. (1990), ―Pulic Policy and Economic Growth: Devoloping Neoclassical Implications‖, Journal of Political
Economy 98:5, s.126-150.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
Kneller, Richard, Michael Bleaney and Norman Gemmell, (1999), ―Growth, Public Policy and the Government Budget
Constraint: Evidence from OECD Countries,‖ Discussion Paper No.98/14.
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Working Papers, No. 176, OECD Publishing.
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growth: Harberger‘s superneutrality conjecture‖, Journal of Public Economics.
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Economic Modelling, 22 s.423-438.
Pesaran, M., Shin, Y. and Smith, R. J. (2001), ―Bounds Testing Approaches to the Analysis of Level Relationships‖, Journal of
Applied Econometrics, 16 s.289-326.
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Paper No 5028, &lt;http://www.nber.org/papers/w5028&gt;

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Roubini N. ve Milesi-Feretti G. M. (1994), ―Taxation and Endegenous Growth in Open Economies‖,NBER Working Paper No
4881, &lt;http://www.nber.org/papers/w4881&gt;
Roubini ve Milesi-Feretti G. M. (1995), ―Growth Effect of Income and Consumption Taxes: Positive and Normative Analyses‖,
NBER Working Paper No 5317, &lt;http://www.nber.org/papers/w5317&gt;
Solow, R. M. (1956), ―A Contribution to the Theory of Economic Growth‖,Quarterly Journal of Economics, vol.70, s. 65-94.
Temiz, Dilek(2008), ―Türkiye'de Vergi Gelirleri ve Ekonomik Büyüme ĠliĢkisi: 1960-2006 Dönemi‖, 2. Ulusal Ġktisat Kongresi,
20-22 ġubat 2008, DEÜ ĠĠBF Ġktisat Bölümü, Ġzmir.
Turan, Taner, (2008), ―Maliye Politikası Araçlarının Ekonomik Büyüme Üzerindeki Etkileri‖,SayıĢtay Dergisi,Sayı:69, NisanHaziran.
Yılmaz, Hakan (1996); "Türkiye'de Vergi Yapısı ve 1980'den Sonra Sektörel Vergi Yüklerinin GeliĢimi" Uzmanlık Tezi - Devlet
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Ankara.

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                <text>The Relationship Between Economic Growth And Tax Revenue: Bounds  Testing</text>
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GÖÇER, İsmet
BULUT, Şahin
DAM, M. Metin</text>
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                <text>Taxes are one of the most important sources of finance; moreover they are able to have  various impacts on chief indicators of economy. However, taxes may have negative as well as  positive impacts. The relationship between economic growth and tax revenue in Turkish economy  has been studied in this survey. In the survey, the existence of relationship between series and cointegration  as well as long and short term links have been studied through ARDL bounds testing  and it was observed that series moved together in the long term.  In the long term analysis, a relationship between indirect and direct taxes with economic growth  has a meaningful and positive relationship. It was found out that direct taxes effect bigger than  indirect taxes.  In the short term analysis, the coefficient of vector error correction model was signed negative and  statistically meaningful. This means that the deviation, which took place in the short term between  series which moved together in the long term, has disappeared and series came close to each other.  Again, both types of taxes in the analysis of short-term growth is positive and statistically  significant influenced, besides in the short term analysis it was observed that indirect taxes effect  bigger than direct taxes.</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Relationship Between Economic Growth And Tax Revenue: Bounds
Testing
Mehmet MERCAN

Adnan Menderes Üniversitesi
mmercan@adu.edu.tr
Ġsmet GÖÇER

Adnan Menderes Üniversitesi
igocer@adu.edu.tr
ġahin BULUT

Adnan Menderes Üniversitesi
sbulut@adu.edu.tr
M. Metin DAM

Adnan Menderes Üniversitesi
metindam@hotmail.com

Abstract : Taxes are one of the most important sources of finance; moreover they are able to have
various impacts on chief indicators of economy. However, taxes may have negative as well as
positive impacts. The relationship between economic growth and tax revenue in Turkish economy
has been studied in this survey. In the survey, the existence of relationship between series and cointegration as well as long and short term links have been studied through ARDL bounds testing
and it was observed that series moved together in the long term.
In the long term analysis, a relationship between indirect and direct taxes with economic growth
has a meaningful and positive relationship. It was found out that direct taxes effect bigger than
indirect taxes.
In the short term analysis, the coefficient of vector error correction model was signed negative and
statistically meaningful. This means that the deviation, which took place in the short term between
series which moved together in the long term, has disappeared and series came close to each other.
Again, both types of taxes in the analysis of short-term growth is positive and statistically
significant influenced, besides in the short term analysis it was observed that indirect taxes effect
bigger than direct taxes.
Key words: Economic Growth, Indirect and direct taxes revenue, Bounds testing.
JEL Sınıflandırması: E62, H21, H27, O49.

1. Introduction
Tax is the transfer of the sources without any provision and under the rules of political force from the
economical deparments of the goverment in order to provide the expenses of the puclic facilities (Temiz, 2008).
Throughout the history countries have provided the income they need to act their basic functions by collecting
taxes.At the same time tax policy is used for the economic and social purposes like allocation for sources through
increasing internal savings,increasing economic growth of the country, providing price stability and controling the
production and consumption level indirectly.
Tax incomes are one of the most essential sources to administer the public facilities.In order to provide
social security services,state investments and the other public expenses the goverment will either collect taxes or get
into the debt. Getting into debt is the last way to prefer for the countries.
Taxes in an economic system may effect the amount of the goods and services produced and the income and
prices of production factors directly or indirectly (Yılmaz, 1996). The taxes which have the capacity to effect directly

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
people‘s decisions to use for the labour, savings,investment and source can be effective on the economic growth via
different channels.Especially for the developing economies analysing the relationship between the taxes that are the
primary source for the public and the growth would contribute to form tax policies and improve some applications
(Gül ve Kenar, 2009).Especially in developing countries today taxation policy which is an instrument for the
financial policy is a very effective financial instrument (Eker vd., 1996:32).
We can categorize the taxes in use today in three groups according to the characters of the event that
caused for their use: The taxes about the incomes including income taxes, corporation taxes,etc;the taxes about
expenses including income taxes based upon expenses,transaction and sale taxes and custom taxes,etc;the taxes
about the propertiess and the transfer of the properties including general property taxes,real estate taxes,capital
taxes,motor vehicle taxes (Temiz,2008).
Also taxes can be categorized in some other forms as in rem-monetary,spesific-advolorem and directindirect taxes (Bulutoğlu,1970). Furthermore it is also common to categorize the taxes in two big classes as direct or
indirect. While analysing the reflection of the taxes on the economic growth in recent studies, especially direct and
indirect identification is used.This identification is also very essential to form good taxation systems.
Direct taxes are the taxes collected from the individuals and the corporations according to their income
level whose tax payer and payer is the same. In these taxes there is no possibility for the tax payers to reflect his tax
obligation to the others. Income taxes that the goverment collect from the factor incomes (interest, fee, profit,
annuity) and taxes on the properties and corporation taxes are the example for the direct taxes (Turan,2008).
On the other hand indirect taxes are the taxes resulted from the use of goods and services.Everybody
using the taxable goods and services pay the tax at the same percentage however income they have.In these taxes the
tax payer and its payer is different. The Value Added Tax and the excies tax are in the group of indirect taxes.
(Temiz,2008).
The situation desired in the taxation policies is to provide most of the tax collection by the direct
taxes.These taxes mostly support the economic growth. However, indirect taxes can contribute to the economic
growth like direct taxes if they are used suitable for economic structure of the country,too. Economic growth
expresses the increase of the real national income in the length of time.In developed or especially developing
countries economic growth has a special importance. There are many theories in this issue.Economic growth theories
are analysed in terms of their factors,qualities and characters that have effects on the economic growth. In this
context economic growth theories mostly major on the matters of capital accumulation,technical improvement and
population increase.In an economy there are two commonly approved approaches about the economic growth rate.
These are Harrod-Domar and Neo-classic Harrod-Domar growth model founded by making Keynesyen balance
model dinamic and based on Keynesyen hypothesis actracted many attentions in the post-war years. Harrod-Domar
model suggests the idea that growth rate is determined by the capital accumulation.In this case it can be possible for
the goverment to realize the target growth rate by intervening the economy via the financial policy instruments or to
remove the possible drifts on the long term growth rate.In this context the government on one hand has a great role
to realize the economic growth with the public expenses,on the other hand it can use the taxation policy as an
instrument for an increase in the total savings quantity of the economy.In this case it will be possible to increase the
public savings,to encourage private investments and to resist against the structural instabilities which are derived
from the economic growth and may cause a danger in growth.(Demircan, 2003).
At the same time indirect taxes can help to reduce the consumption and encourage the savings in the
economy by effecting the relative prices.So an indirect tax on the consumption goods can reduce the expenses on
these goods by increasing the consumption cost and it can help these sources to be directed to the investments.
(Temiz,2008).
In this study the relationship between the indirect and direct tax incomes and the economic growth in
Turkey is analysed with the limit test approach by the help of the annual information between 1924 and 2009
years.In the study,in second section following the introduction part,the sructure of the taxation in Turkey is analysed
and third section including a summary of literature about the subject follows. Method and information set are in the
fourth,analyse and empiric findings are in the fifith section.The study ends with a short conclusion and evaluation
part.

2. Taxation Applications In Turkey
While in developed countries especially rate of the direct taxes are high in tax incomes,in developing
countries indirect taxes are high.In developed countries avarage %26 of total taxes , in developing countries more
than %50 of taxes is composed of indirect taxes. The main reason for that is the application of indirect taxes is easier
in spite of the difficulties in the application of the taxes collected on the income, the individuals are unaware about

627

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

these taxes and they response less to the tax implementors.The high rate of the indirect taxes in developing countries
is closely related to the economic growth.Since the taxation systems are not exactly efficient in these countries,
indirect taxes are emphasized.(Temiz,2008).
When the improvement of indirect and direct taxes are analysed in Turkey a great and fast change stand out
in the composition of the direct and indirect taxes in total tax incomes especially post-1980. While the indirect tax
rate is %36 in 1980,this rate went up to % 64 when we were in 2009. It can be said that the taxes collected from
goods and services like value added tax and excise tax have an essential role in total tax incomes in the increase of
indirect taxes.
Especially after the economic crisis in 1994 in Turkey the rate of indirect taxes in total taxes increased an
this rate rised until %69.(Graphic 1).After economic crisis and The Marmara Earthquake in 1999 some temporary
taxes became permanent and this was effective on this rise.
While 71 Billion TL of tax (%36)of the total 196 Billion TL of tax collected in 2009 in Turkey is consisted
of direct taxes, the rest of 125 Billions of TL(%64)of tax is consisted of indirect taxes. This shows we are very far
away from the ideal porsion rate between direct and indirect taxes.
Graphic: 1 The Portion of Direct and Indirect Taxes in Tax Incomes in Turkey
80
70
60
50

Direct Dolaysız
Tax

40

Vergi

Dolaylı
İndirect
Tax

30

Vergi

20
10
0
Source: Income Directory Management (GĠB).
1923 1930 1937 1944 1951 1958 1965 1972 1979 1986 1993 2000 2007

One important point is that the rate of the tax incomes of the countries in the rate of gross national product.While this
rate passes %40 in developed countries,it is %20 in developing countries.(Graphic 2). This rate is essential in
showing how much public expenses are financed by the tax incomes and whether the countries need external loans or
not.
Graphic2: The Rate of Tax Incomes in the Rate of Gross National Product (%)
45
40
35

OECD
OECD
Total Toplam

30

OECD Amerika
OECD
OECD
USA Pasifik

25

OECD Avrupa

20

OECD
ABPasific
15

15

Türkiye

10

OECD Europe

5

EU 15

19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07

0

Turkey

Source: OECD, Revenue Statistics of OECD Member Countries, Paris,2009.

628

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

3. Literature
There is a wide literature on the subject of the effects of the direct and indirect taxes on long term growth.In
accordance with the Neo-classic growth model Solow (1956) supposes that taxation has no effect on long term
growth. Most of the studies in accordance with the Internal growing model result direct and indirect taxes have a
negative effect on the long term growth. It is accepted that indirect taxes have more effects on the gowth than the
direct taxes.
Marsden (1983),wanted to stress that as the tax rates increase it causes low growth. Skinner (1987), reached
a similar result by using the rates of personal and institutional income taxes.
King ve Rebelo (1990), observed about % 2 of decrease in growth per year when tax rates increased %
10.As a result in the study, he stated that in long term income taxes have a decreasing effect on the individual
earnings,on the other hand Mendoza vd. (1997) stated that in theory it can be estimated that the changes in income
taxes affect the investments and the growth but in practise the tax policy and the changes on composition of direct
and indirect taxes is an uneffective instrument to effect the economical growth in long term.
Easterly ve Rebelo (1992) who used an information set about 1970-1988 years for many developing countries
concluded that two measurements about marginal income rates have a negative but unimportant effect on the
individual consumption growth .
Plosser (1992) stated that there is a negative relationship between avarage individual real growing rates and
avarage tax rates on income and profits in OECD countries,while William Easterley ve Sergio Robelo (1993) stated
that this negative relationship disappeared when the begining income stage was checked. Writers also stated that the
countries applying low tax rates was more succesful in reaching a high growing speed than the countries applying
high tax rates.
Roubini and Milesi-Feretti (1994) searched the effects of income taxes in open economy on the economic
growth in accordence with the internal growing models.They especially stressed on the effects of the taxation of the
income on the pysical capital saving decision of private sector and increase of the allocations via individual capital
savings.Writers concluded that allocation and pysical taxes have negative effects on the growth.
In an another study Roubini and Milesi-Feretti (1995) searched the effects of income and consumption taxes
in the process based on the pysical and individual capital savings. The results showed that in general taxation of
factor incomes(individual and pysical capital) had decreasing effects on the growth.The effect of consumption taxes
on the growth is determined to change according to the supply of labour flexibility and consequently free time
preferances.
Razin and Yuen (1995) searched the effects of taxation of capital income on the long term growth in
accordence with the internal growing model which is open to the international capital movements and the population
increase is considered as an internal variable. The results of the study containing G7 countries showed that in the
case of whole capital movement, cuts on the capital taxes would cause a decrease on the individual income rates and
growth.
Engen ve Skinner (1992) who used an information set including 1970-1985 years about 107 countries
stated that both expenses of the state and the taxation have strong and negative effects on the growth,it was estimated
a 1.4 percent point decrease on long term growth by increasing the budget with 10 percent in balance on the expenses
of the state and the taxation,the administritive structure of the tax system was also important on the evaluation of the
effect of the taxation on the production , Ram‘s results were supported by the instrumental variables approach.
Engen ve Skinner (1996) searhed the effects of a general taxation cut under the control of three approach
on the long term growth.These approaches consists of a micro model containing investigation of historical time
series for the USA, a stage regresion analysis, labour supply,investment demand and productivity boost. The result
of the study show that taxation had a mid-staged effect on the long term growth.
Leibfritz and the others (1997) stated that about a 10 percent point increase on the tax rates in the past 35
years could have decreased the OECD annual growth rates about ½ percent point,however this calculation had some
defects to evaluate the effects of taxes on the economy so it was necessary to support these calculations with an
another approach.
Kneller and the others (1999) who studied weather the proofs in OECD countries are coherent with the
estimates of the endogenic growing models anticipating that puclic expenses and the structure of the taxes could
effect the stable growth rate by using an information set including 1970 and 1995 years about 22 OECD countries
reached a fact that non-deforming taxation didn‘t decrease the growth but deforming taxation decreased the growth,
productive state expenses increased the growth but non-productive expenses didn‘t increased the growth.

629

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Anastassiou and Dritsaki (2005)searched for the Greece economy the tax incomes,direct marginal tax rates
and the relationship between savings-income rate and growth rate.In the study to search for the long term realtions
Johansen koentegrasyon method,fort he short term relations Granger causility test was used.The proofs showed the
existence of a long term relation between the variations in the study. In term of short term relations, it was found a
one way casual relation from direct marginal tax rates and tax incomes to the growth.
Durkaya ve Ceylan (2006) analised the realtionship between 1980–2004 years tax incomes and economical
growth with Engle-Granger integration test and casuality test and figured out that there was a double sided realtion
between direct taxes and growth,however there was no realtionship between indirect taxes and the growth. It was
stated that if the tax increases to increase the tax incomes had been made upon the indirect taxes,the negative effect
of the tax increase on the growth would have been decreased. It was also stated that the change of the current tax
items from direct taxes to indirect taxes would make the same effect.
In his study Demircan(2003)stated that there was a close relationship betweeen groth and economy policies
and a growth and development in the country ecenomy was closely related with the income tax decreases. He stated
that to work was important and the tax decreases which increase the production and national income would directly
increase the gross national product rate,and also if there was a politic and economic stability in the state,the changes
to reconstruct in tax conduction and mechanisms for taxing encouragement had positive effects on the growth and
development.Also he stated that the direct taxes taken on expenses were both for providing the equality in taxes and
they affected indirectly economic growth and development in terms of encouraging the savings by reducing the
luxurious consumptions.

4. Data And Methods
This survey covers 1924 and 2009. 3 variables have been used and all variables have been calculated in
percentages. The variable vektör of the survey is: Yt=[DLIt, DSZt]. Y stands for Gross National Product (GNP), DLI
indirect tax income and DSZ direct tax income. All data have been taken from the website of the Directorship of
Income(www.gib.gov.tr).
In this survey boundary test approach which was developed by Pesaran vd.(2001) has been used in order to
study the effect of tax revenue over economic growth. This method is considered to be more usable when comperad
to cointegration method developed by Engle-Granger. Series have to be stable in the first differnce in the EngleGranger and Johansen. Series can be in different stability levels in ARDL method. Another advantage of boundary
test approach is that analysis can be made with only a few data. (Narayan and narayan, 2004:25) More over as the
regresive variables included in analysis. The level and regressive values of independed veriables can be observed on
depended variables. In boundary test apprach firstly whether series move together in long-term is analysized by
means of ARDL cointegration method. Ġf there is conĢntegration relationship betwen series the coefficient and
statistic of regression carried out with this serries will be meaningfull and reliable. Ġf relationship can be pointed out
whit be serries lon an short term analysis are held by means of ARDL method.

5. Analysis And Empirical Findings
5.1. ADF Unit Root Test
If time serries is not stable, medyan, variance and covariance changeble in time. Shocks take place in a term
can effect the others and it becomes permanent. The analysis carried out in this case includs fake regression and F
and t statistics loos their meaning (Gujarati, 1999:2.712).
The stability levels of serries and unitroot test have been studied with ADF test.
DF test is carried out based on three regression equation (Dickey and Fuller, 1979).
Simple position:

Yt  Yt 1  ut

(1)

Intercept:

Yt   0  Yt 1  u

(2)

Trend and intercept:

630

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Yt   0  1 t  Yt 1  ut

(3)

As a result of this tests the DF statistic been compared Mac Kinnon crtitical values zero hypotesis is tested against
the lternative hypotesis. Zero hypotesis showes that serries is not stable alternative hypotesis. Ġf error correction term
is autocorrelated equation (3) is regulated as:
m

Y   0  1 t  Yt 1  i  Yt i ut

(4)

i 1

Here m stands for regression length and  stands for difference operator. Regression number depends on obtaining
model without autocorrelation. A test which is carried out this way is called ADF test in short. Tests results obtained
accordingly are shown in Table 1.
Table 1: ADF Test Results Expanded for Dickey-Fuller Variables (ADF)
Level Values
1. Difference
Variables

ADF sts..

Mac Kinnon %1
test values

ADF sts.

Mac Kinnon %1
test values

G
-1,83
-3,51
-8,40[2]
-3,51
DLI
-1,78
-3,52
-3,55[10]
-3,52
DSZ
-2,41
-3,51
-9,17[2]
-3,51
Note:The values in [ ] points out teh number. By taking the lenght which Akaike is the lowest. Mac Kinnon test
values pointed out without trend and intercept test values.
In the Table 1 it is observed that all series I(1) when their first differences are taken.
5.2. Co-Integration Test
The level values of many macroeconomic variables are not stable. If there is a co-integration relationship
between series in other words if series move together in the long term, a fake regretion trouble will not be faced in an
analysis to be carried out with level values(Pesaran etc, 2001:290;Gujarati 1999). However, the dynamic behaviors
of variables moving together in the long term cause some deviations in the balance equation(Enders, 1996:151).
This is one of the basic characteristic of co-integration variables and plays an important part in the short term
dynamic. The dynamic model appearing along with this process is called error correction model(Enders, 1995: 365).
An unrestricted error correction model is setup so that boundary test approach can be applied. (unrestricted
error correction model: UECM) This model can be applied to our survey as fallows:
m

m

i 1

i 0

m

Gt   0   1i Gt i   2i DLIt i   3i DSZt i  4Gt 1 
i 0

 5 DLIt 1   6 DSZt 1  ut

(5)

Here, m; stands for optimum length, ∆ stands for difference operator, ut stands for error correction term,
those which are given with other letter abbreviation stands fort he meanings in variable definitions. In this survey
optimum lenght has been determined by means of Akaike Criterion. According to Kamas ve Joyce (1993)
There musn‘t be restpective connection error terns of optimum laght lend so that the test can give healthy
result. If there is autcorolation in the lag lenght which akaike criteria lowest. One has to next lag.
The test result of lag lenght are presented in table 2. Maksimum lag lenght is 4 since the data in this survey
is annual.

m
1*
2
3
4

Table 2: The lag length is point out for boundary test
AIC
LM Test
8,217
0,69
8,295
0,47
8,246
0,04
8,287
0,19

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
The optiumum lag length determined as a one in the table 2.In this lag length hasn‘t aoutocorolation.
After lag length determined it passed testing process cointegration relation ship between variables.
In boundary cointegration relationship between values is made by mines of testing ziro hypotesis.
(H0:α4=α5=α6=0) Zero hypotesis accept or reject is determinated with F test.
Calculate value contrasted table conpered and contrast min and max value in Pesseran etc 2001 table. In the
fisrt case if calculated F statistic value lover than min critic value. It is decided that there is coengration relation
between series. In the second case if calculated F statistic value in between max and min critice value no definite
commend can be made. In this case must be tried alternative cointegration methots. Finaly f calculated F statistic
value bigger than table max critic it is decidet that there is cointegration relationship between serious.
In this study unrestricted error correction model is estimate to lag length and calculated F statistic. Results
given in table 3. For testing H0 calculated F statistic value compared with critic value which taken Pesaran etc 2001
in table 3. This critic values given fort 2 independed variable and mining full %1.
Table 3: Boundary Test Results
k
F Calculated
Min
Max
2
14,20
5,15
6,36
Note: k stands for variable number. Critical values are extracted from Table CI (iii) in Pesaran etc.
It is observed that calculated F statistics is higher than utmost critical value. In this case H0 hypothesis is
denied and it is concluded that there is a co-integration relationship between variables. Since the existence of cointegration relationship between series is remarked, ARDL models started to be estimated to search the long and
short term relationships between variables.
5.3 Long Term Analysis
ARDL model which is used in order to analyse long term relations is formulated as:
m

n

p

i 1

i 0

i 0

Gt   0  1iGt i  2i DLIt i  3i DSZt i  ut

(6)

Here m, n, p is length and determined with AIC. This transaction has been carried out with the method that Kamas
and Joyce(1993) proposed in their causality analyses so as to determine length. Therefore; first of all, regression
according to dependent variables‘ own regressive values is made and the length of the whit out autocorelation model
which gives the lowest AIC value. Then, regression models were formed by keeping the identified length of the
dependent variable stable and all possible regressions of foreign direct investment variable which is the first
independent variable and the regressive number of independent variables was found by taking AIC values into
consideration. Optimum regression number was obtained by repeating similar transactions for other variables. As a
result of the transaction carried out, it was decided that ARDL(4,1,4) was the long term ARDL model to be
estimated and results are presented in table 4.
The Lag Length determine for The Long Term Boundary Test
m
AIC
LM
n
AIC
LM
p
AIC
(G)
Test
(DLI)
Test
(DSZ)
0
0
8,710 0,00
0
8,382
1
8,889 0,83
1
8,262
1*
8,600 0,60
2
8,925 0,11
2
8,621 0,94
2
8,286
3
8,900 0,17
3
8,643 0,14
3
8,309
4
8,662 0,23
4*
8,875 0,99
4*
8,244

LM Test
0,00
0,93
0,61
0,01
0,25

The estimate results of long term ARDL(4,1,4) and long term coefficients calculated based on the results mentioned
are available in table 5.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Table 5: The results of Estimated ARDL (4,1,4) Model and The Long Term Coefficients
Variables
Coefficient
t-statistical
c
0.980880
0.400290
Gt-1
-0.003891
-0.027863
Gt-2
-0.092723
-0.723156
Gt-3
-0.004752
-0.042695
Gt-4
-0.122843
-1.233238
DLIt
0.323505
3.733284
DLIt-1
0.131856
1.405338
DSZt
0.276303
4.966621
DSZt-1
0.208335
3.236775
DSZt-2
-0.025281
-0.367004
DSZt-3
0.016428
0.258477
DSZt-4
0.156683
2.534998
The Long Term Coefficient
DLI
0,371963
4,251
DSZ
0,461113
4,094
c
0,801235
0,401
Diagnosis Tests
R2=0.82
2BGAB(2 )=1,588(0.21)
2
2WDV=0,309(0.99)
R =0.79
F ist.=29,58(0,00)
2JBN=24,78(0.00)
DW=1,84
2RRMKH(1)=0,13(0.71)
Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values.
Taking the results in table 5 into consideration, both direct and indirect taxes increase economic growth and
affect it statistically meaningfully.
Dolaysız vergilerin büyümeyi, dolaylı vergilerden daha çok arttırdığı görülmektedir.
5.4. Kısa Dönem Analizi
Short term relation between variables again investigated by means of ARDL Error Correction Model based
on boundary test approach. ARDL model which is used in order to analyse short term relations is formulated as:
m

n

p

i 1

i 0

i 0

Gt   0  1ECt 1   2i Gt i  3i DLIt i  2i DSZt i  ut (7)
Here ECt-1 is error correction terms and it stands for one term lagged of error terms series which it is
obtained from long term relationship. Coefficient for this variable is point out duration of sort term deviation. If this
sign of coefficient is negative, deviations happen in short term between series is convergences to long term balance
value. If this sign of coefficient is positive, not convergences to long term balance value.
In this model lag length of veriables determineted just like long term. As a result of the transaction carried
out, it was decided that ARDL(5.1.0.0.0) was the short term ARDL model to be estimated and results are presented
in Table 6.
Table 6: Determination of Lag Length for short Term Boundary Test
m
AIC
LM
n
AIC
LM
p
AIC
(∆G)
Testi
(∆DLI)
Testi
(∆DSZ)
0
0
8,893 0,28
0
8,633
1
9,002 0,58
1
8,790 0,12
1
8,422
2
8,939 0,33
2
8,428
2*
8,745 0,44
3
8,769 0,05
3
8,413
3*
8,912 0,77
4
8,927 0,31
4
8,783 0,02
4*
8,271

633

LM
Testi
0,05
0,01
0,41
0,003
0,50

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Tablo 6‘da da görüldüğü üzere, tahmin edilecek kısa dönem ARDL modelinin ARDL(3,2,4) modeli olduğu sonucuna
ulaĢılmıĢtır. ARDL(3,2,4) modeli tahmin edilmiĢ ve kısa dönem tahmin sonuçları Tablo 7‘de verilmiĢtir.
Table 7: The Results of ARDL (3.2.4) Model
DeğiĢken
Katsayı
t-istatistiği
c
-0.100249
-0.064078
0.043531
0.212927
Gt-1
-0.030741
-0.191601
Gt-2
0.009492
0.079344
Gt-3
DLIt
0.292074
3.742568
0.100524
0.937896
DLIt-1
-0.033611
-0.398041
DLIt-2
DSZt
0.282694
5.472546
0.227042
2.792811
DSZt-1
-0.018289
-0.187475
DSZt-2
0.038494
0.497487
DSZt-3
DSZt-4
0.187336
3.517646
ECt-1
-0.946504
-3.807904
Tanısal Testler
R2=0,64
2BGAB(2 )=0,94(0,39)
2WDV=0,31(0,99)
R 2 =0,58
DW=1,99
2JBN=24,65(0,00)
F=10,42(0,00)
2RRMKH(1)=4,76(0,03)
Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values
Coefficient of ECt-1 (error correction terms) is -0,72 in Table 7. This coefficient is negative and meaningful
like expected. If coefficient‘s signs of error correction terms is negative, model is convergences to long term balance
level.
If this sign of coefficient is negative, deviations happen in short term between series is convergences to long
term balance value. If this sign of coefficient is positive, not convergences to long term balance value (Narayan ve
Smyth 2006). Therefore error correction of model is works. Although capital movements impact on economic
growth, like long term effect, is positive and according with theoritical expectation, statistically insignificant.
Tablo 7‘deki sonuçlar incelendiğinde; hata düzeltme teriminin (EC) katsayısı -0,94 ve t istatistiği anlamlı
çıkmıĢtır. Bu katsayı beklenildiği gibi negatif ve istatistikî olarak anlamlıdır. Dolayısıyla modelin hata düzeltme
terimi çalıĢmaktadır. Yani, uzun dönemde birlikte hareket eden seriler arasında kısa dönemde meydana gelen
sapmalar ortadan kalkmakta ve seriler tekrar uzun dönem denge iliĢkisine yaklaĢmaktadırlar. Dolaylı ve dolaysız
vergiler, cari dönemde de gecikmeli dönemlerde de büyümeyi arttırıcı yönde ve istatistikî olarak anlamlı düzeyde
etkilemektedir. Bu sonuçlar beklentilerimize ve iktisat teorisine uygundur. Dolaylı vergilerin büyümeyi dolaysız
vergilerden az da olsa daha çok etkilediği görülmektedir.

Result And Evaluation
In this study, from the declaration of Republic to today‘s Turkey, the link between the tax income and the
economical development is analysis in border test method.
To understand whether tax income varieties have different effect on development, direct indirect taxes were
analysied separately.
In the cooperation analysis, it is seen that there is a co ordination between the direct and indirect income and
economical development. That is, these series have to movement accordingly. So, it is though that the recreation
analysis administered among the series shold give us reasonable results.

634

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

In long term analysis, it is seen that both the direct and indirect tax effect the development positively. In the
result of long term analysis, it is seen that indirect taxes increase the economical development more than the direct
taxes. This result is more suitable for our economical thought and expectations.
In the short term analysis, the extra valve of correcting error term was seen negative and statically
acceptable. This the correction of the model is working. It can be estimated that there is a balance in the long term
series and the mis direction can be compensated in long term values.
The direct and indirect taxes in the monetary term effect the development considerably. These results are
suitable for our economical theory. It is seen that the direct taxes effect the development slightly more than the
indirect taxes. This is little different from our economical literature.
As seen from this study, the taxing policy, one of the most important part of economical policy, if used in a
suitable condition, is one of the major means of development.
In order to see the Country developing in the long term, it should be better to emphasize on the indirect
taxes instead of direct taxes. Because there is on unsuitable part of direct taxes for the economy. To decrease the
V.A.T Value Added Tax in the common consuming goods will enable the low and middle-income society to have
and consume more properties.
This will also decrease tha gap between classes, decrease the clashes among classes. Ġt will also help to
balance the income and increase the welfare of the country.

References
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                <text>The Relationship Between Economic Growth And Tax Revenue: Bounds  Testing</text>
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GÖÇER, İsmet
BULUT, Şahin
DAM, M. Metin</text>
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                <text>Taxes are one of the most important sources of finance; moreover they are able to have  various impacts on chief indicators of economy. However, taxes may have negative as well as  positive impacts. The relationship between economic growth and tax revenue in Turkish economy  has been studied in this survey. In the survey, the existence of relationship between series and cointegration  as well as long and short term links have been studied through ARDL bounds testing  and it was observed that series moved together in the long term.  In the long term analysis, a relationship between indirect and direct taxes with economic growth  has a meaningful and positive relationship. It was found out that direct taxes effect bigger than  indirect taxes.  In the short term analysis, the coefficient of vector error correction model was signed negative and  statistically meaningful. This means that the deviation, which took place in the short term between  series which moved together in the long term, has disappeared and series came close to each other.  Again, both types of taxes in the analysis of short-term growth is positive and statistically  significant influenced, besides in the short term analysis it was observed that indirect taxes effect  bigger than direct taxes.</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Effect Of Capital Movements Liberalisation On Economical
Development: Boundary Test Approach
Mehmet MERCAN
ADÜ. Social Science Institute
mmercan48@hotmail.com
Osman PEKER
Dr., ADÜ. Nazilli ĠĠBF
ottopeker@Yahoo.com
Abstract: In this study, liberalization of capital movements‘ impact on economic growth in
Turkey has been investigated by the approach of the bounds testing. According to the empirical
findings of study, in both long and short-term, capital movements impact on economic growth is
statistically insignificant. This result is far from meeting our theoretical expectations.
Key Words: Turkey, Capital Movement, Libarelization, the Bound Test Approach.

1. Introduction
The view about that financial liberalisation would cause much higher economical development has been
expressed firstly by Mc Kinnon and Show. According to this view known as Mc Kinnon and Show hypothesis in
literature, the maximum rates applied to the deposit rates will cause a decrease in real interest rates in an economy
repressed as financially. Considering the possibility of a decrease in real interest rates to the minus degrees in an
inflationist atmosphere, the house hold could direct its savings to the unproductive investments like real estate, gold
and hard goods instead of financial havings. By limiting the loanable fonds of banking sector, this situation will
cause the credits pass to the preferred sectors and firms without being predicted on the objective criteria instead of
their expected returns and will prevent the use of sources effectively. If the press on the interest rates is removed, it
will be provided to be used the sources in productive areas via trending of savings to the banking sector. As the bank
deposit will expand by this, much more credit possibility for investment will occur and economical growth will
increase.(Mathieson, 1980; Melo ve Tybout, 1986; Dornbush ve Reynoso, 1989).
In international capital flows mutual profits exist for the countries. As the direction of capital flows is
generally from the country that have more capital to the country that have less capital, marginal product of the capital
is in higher rates than the country that has the capital.Thus, the capital is directed to more productive and effective
fields. In this process that means much more production will happen per capital unit, a welfare increase occurs also
in the country giving the capital.(Eichengreen vd., 1998:12; Bacchetta, 1992: 474). When evaluated on this point of
view, for the poor countries capital movements liberalisation can be seen as an economic policy that is necessary to
use for increasing the investment possibilities and decreasing the capital costs. (Fischer, 1998; Summers, 2000).
By the liberalasation of capital movements the market structure in financial sector changes in the direction
of weaking the monopoly power of institutions. As this provides the chance to act in more suitable conditions in
credit markets, it causes an increase on realizable real estates and a decrease on borrowing costs. (Kenen, 1976: 31).
In this process that means the specializing in the financial services, the increasing specialization causes a
development in international economic benefits. (Mathreson ve Suarez, 1992: 41).
However, when the recent developments considered we can see that capital movements gradually act more
independently than real ecenomy. While most of the total transations in currency markets consists of short period
profit making commercial transations, very little part of this is directed to the commercial activities. This transactions
is the main reason for the the weekness in the international currency capital markets. (Verghese, 1985). So in 1980‘s
the foreign capital lost its function in the 1950‘s and in general it tended to speculative short termed portfolio
investments.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

In this term portfolio investments contained most parts of the transations in financial markets. Much growth
in portfolio investments caused some risks to occur in the economies of the countries firstly by decreasing the real
investment possibilities. Especially the possible great fluctuations on the currency rates and financial asset prices
resulted in crises by negatively affecting the macroeconomical balance. Since the capital flows occuring as portfolio
investments can move fast and in a short time,UNCTAD warns for the possible risks. For instance, the determining
factor in capital flows tended to Latin America wasn‘t economic and since it was shaped according the others‘
behaviors, it was speculative. In other words, investment owners behaved speculatively instead of behaving
according to the economical reasons. This increased the prices of real estates while it made the currency of the
country valuable irrationally. With this point of view the Mexican crisis was not a surprise. (Akyüz, 1995: 14).The
Ex post point has revealed that some proofs of Ortodox economy is not realist. Today the countries having much
financial crisis experience especially find it hard to pay their depts. It is anticipated to apply a program for depts in
order not to delay in the system.
In fact Bhagwhati (1998), Rodrik (1998) and Stiglitz (2002), draw attention that capital account
liberalisation doesn‘t improve the growth as it is said; even it may cause crisis. Kaminsky and Reinhart (1999),
Detragiache and Demirguc-Kunt(1998) and Glick and Hutchinson also have expressed the similar views (2001) and
added that financial liberalisation has a tendency in increasing bank and money crisis.According to UNCTAD
(1990) , in a system that has no exchange controls, credit allocation can not be directed to the fields to increase the
effectivity.Because a banking system based on liberal market is less sensible to the persuasion and sources tend to
the short term profits instead of the use for the economical development.
As it is evaluated by the different poinf of views, it is difficult to say that there is an agreement about the
effects of capital movements liberalisations on the econimical growth. Eichengreen and Leblang (2002: 1) point that
it can‘t be estimated weather capital account deficit increases or prevent the growth and in general the proofs are not
enough eventhough many researches are made on the subject.

2. Data And Methods
This survey covers 1998:01 and 2009:09 variables have been used and all variables have been calculated in
percentages. The variable vektör of the survey is: yt=[it, m2t, opent, tkt] y stands for Gross National Product (GNP), i
stands for Treasury domestic borrowing interest rates, m2, stands for Money supply, open stands for
opennes(export+import), tk stands for total capital movement liberalisation All data have been taken from the
website of the Central Bank of Republic of Turkey(electronic data delivery system)( http://evds.tcmb.gov.tr).
In this survey boundary test approach which was developed by Pesaran vd.(2001) has been used in order to
study the effect of capital movement liberalisation over economic growth. This method is considered to be more
usable when comperad to cointegration method developed by Engle-Granger. Series have to be stable in the first
differnce in the Engle-Granger and Johansen. Series can be in different stability levels in ARDL method. Another
advantage of boundary test approach is that analysis can be made with only a few data. (Narayan and narayan,
2004:25) More over as the regresive variables included in analysis. The level and regressive values of independed
veriables can be observed on depended variables. In boundary test apprach firstly whether series move together in
long-term is analysized by means of ARDL cointegration method. Ġf there is conĢntegration relationship betwen
series the coefficient and statistic of regression carried out with this serries will be meaningfull and reliable. If
relationship can be pointed out whit be serries lon an short term analysis are held by means of ARDL method.

3. Analysis And Empirical Findings
Before analysis, the certain tests and procedures relation variables used in the study are needed. tk,
open ve y series have seasonal effect. Series were purifed from seosanal effect by means of Moving
Avarage Methods. Stationary of series were tested with Augmented Dickey Fuller: ADF
3.1. ADF Unit Root Test
If time serries is not stable, medyan, variance and covariance changeble in time. Shocks take place in a term
can effect the others and it becomes permanent. The analysis carried out in this case includs fake regression and F
and t statistics loos their meaning (Gujarati, 1999:2.712).
The stability levels of serries and unitroot test have been studied with ADF test.
DF test is carried out based on three regression equation (Dickey and Fuller, 1979).

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Simple situation:

Yt  Yt 1  ut

(1)

Intercept:

Yt   0  Yt 1  u

(2)

Trend and intercept:

Yt   0  1 t  Yt 1  ut

(3)

As a result of this tests the DF statistic been compared Mac Kinnon crtitical values zero hypotesis is tested
against the lternative hypotesis. Zero hypotesis showes that serries is not stable alternative hypotesis. Ġf error
correction term is autocorrelated equation (3) is regulated as:
m

Y   0   1 t  Yt 1   i  Yt i u t

(4)

i 1

Here m stands for regression length and  stands for difference operator. Regression number depends on
obtaining model without autocorrelation. A test which is carried out this way is called ADF test in short. Tests
results obtained accordingly are shown in Table 1.
Table 1: ADF Test Results Expanded for Dickey-Fuller Variables (ADF)
Variables
ADF Test
Critical Values
Y
-1,06[11]
-3,48
Δy
-7,04[10]
-3,48
İ
-2,14[2]
-3,47
Δi
-9,86[1]
-3,47
m2
-6,02[3]
-4,02
o p en
-3,14[12]
-3,48
Δo p en
-5,69[10]
-3,48
Tk
-3,07[5]
-3,47
Δtk
-10,39[4]
-3,47
Note:The values in [ ] points out teh lag number. By taking the lag lenght which Akaike Lag is the lowest. Mac
Kinnon test values pointed out without trend and intercept test values. In this test were used trend and intercept for
m2 ve open variables, intecept other variables. For first difference of variables(Δ) were used intercept.
3.2. Co-Integration Test
The level values of many macroeconomic variables are not stable. If there is a co-integration relationship
between series in other words if series move together in the long term, a fake regretion trouble will not be faced in an
analysis to be carried out with level values(Pesaran etc, 2001:290;Gujarati 1999). However, the dynamic behaviors
of variables moving together in the long term cause some deviations in the balance equation(Enders, 1996:151).
This is one of the basic characteristic of co-integration variables and plays an important part in the short term
dynamic. The dynamic model appearing along with this process is called error correction model(Enders, 1995: 365).
An unrestricted error correction model is setup so that boundary test approach can be applied. (unrestricted error
correction model: UECM) This model can be applied to our survey as fallows:
m

m

m

i 0

i 0

yt   0   1i yt i    2i i t i    3i m2t i 
i 1

m

m

i 0

i 0

   4i opent i    5i tk t i  6 yt 1  7 i t 1   8 m2 t 1
  9 opent 1  10tk t 1  ut (5)
Here, m; stands for optimum lag length, ∆ stands for difference operator, ut stands for error correction term,
those which are given with other letter abbreviation stands fort he meanings in variable definitions. In this survey

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optimum lag lenght has been determined by means of Akaike Criterion. According to Kamas ve Joyce (1993) there
musn‘t be autocorelation between error terms of model‘s optimum lag length so that the test can give healthy result.
If there is autcorolation in the lag lenght which Akaike Criteria lowest. One has to next lag.
The test result of lag lenght are presented in Table 2. Maksimum lag lenght is 2 since the data in this survey is
monthly.

m
1
2*
3
4
5
6
7
8

AIC
4.86
4,71
4,77
4,80
4,86
4,86
4,91
4,96

LM Test
0,00
0,66
0,66
0,62
0,12
0,32
0,32
0.51

Table 2: The lag length is point out for boundary test
The optiumum lag length determined as a two in the Table 2. In this lag length hasn‘t autocorelation. After
lag length determined it passed testing process cointegration relationship between variables. In boundary
cointegration relationship between values is made by mines of testing ziro hypotesis. (H 0:α4=α5=α6=0) Zero
hypotesis accept or reject is determinated with F test. Calculate value contrasted Table conpered and contrast min
and max value in Pesaran etc. 2001 Table. In the fisrt case if calculated F statistic value lover than min critic value. It
is decided that there is coengration relation between series. In the second case if calculated F statistic value in
between max and min critice value no definite commend can be made. In this case must be tried alternative
coentegration methots. Finaly calculated F statistic value bigger than Table max critic it is decided that there is
cointegration relationship between series.
For testing H0 calculated F statistic value compared with critic value which taken Pesaran etc 2001 in Table
3. This critic values given fort 4 independed variable and mining full %1.
k
Calculated F
Alt Sınır
Üst Sınır
4
6,46
3,74
5,06
Note: k stands for variable number. Critical values are extracted from Table CI (iii) in Pesaran etc.
Tablo 3: Boundary Test Results
It is observed that calculated F statistics is higher than utmost critical value. In this case H0 hypothesis is
denied and it is concluded that there is a co-integration relationship between variables. Since the existence of cointegration relationship between series is remarked, ARDL models started to be estimated to search the long and
short term relationships between variables.
3.3 Long Term Analysis
ARDL model which is used in order to analyse long term relations is formulated as:
m

n

p

i 0

i 0

yt   0  1i yt  i    2i i t  i    3i m2t  i 
i 1

r

k

i 0

i 0

  4i opent  i   5i tk t  i ut (6)
Here m, n, p, r ve k is Lag length and determined with AIC. This transaction has been carried out with the
method that Kamas and Joyce(1993) proposed in their causality analyses so as to determine Lag length. Therefore;
first of all, regression according to dependent variables‘ own regressive values is made and the lag length of without

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otecorelation model which gives the lowest AIC value. Then, regression models were formed by keeping the
identified lag length of the dependent variable stable and all possible regressions of foreign direct investment
variable which is the first independent variable and the regressive number of independent variables was found by
taking AIC values into consideration. Optimum regression number was obtained by repeating similar transactions for
other variables. As a result of the transaction carried out, it was decided that ARDL(7.1.1.0.0) was the long term
ARDL model to be estimated and results are presented in Table 4.

AIC
m
1
2
3
4
5
6
7*
8

5,10
5,12
4,75
4,76
4,78
4,78
4,70
4,72

LM Test
0,00
0,00
0,21
0,08
0,00
0,00
0,76
0,39

n
0
1*
2
3
4
5
6
7
8
r
0*
1
2
3
4
5
6
7
8

AIC

LM Test

4,65
4,58
4,60
4,61
4,61
4,62
4,64
4,65
4,67

0,72
0,97
0,97
0,97
0,77
0,85
0,84
0,84
0,44

p
0
4,60
0,38
4,58
0,62
1*
4,59
0,47
4,59
0,61
2
4,61
0,39
4,60
0,68
3
4,62
0,38
4,61
0,70
4
4,64
0,33
4,62
0,81
5
4,64
0,37
4,63
0,83
6
4,65
0,24
4,64
0,81
7
4,65
0,97
4,66
0,71
8
4,67
0,97
4,67
0,79
k
0*
4,59
0,62
1
4,60
0,49
2
4,61
0,47
3
4,62
0,50
4
4,64
0,47
5
4,64
0,66
6
4,65
0,66
7
4,66
0,57
8
4,66
0,88
Tablo 4: Determination of Lag Length for Long Term Boundary Test
The estimate results of long term ARDL(7.1.1.0.0) and long term coefficients calculated based on the
results mentioned are available in Table 5.
In Table 5; variables of Money supply, opennes and capital movement coefficient‘s signs accord with our
teoric expects.

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Variables
C
i
m2
open
tk
Diagnosis Tests
R2=0.45

Coefficient
0,3481
0,0259
0,2049
0,0538
0,0005

t-statistic
0,8154
3,4533
1,3995
2,0456
0,7142

2BGAB(2 )=0,51(0.60)
2WDV=0,63(0.90)
2JBN=239,78(0.00)
2RRMKH(2)=0,73(0.48)

2

R =0.39
F ist.=7,71(0,00)
DW=2,00

Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values
Tablo 5: The Results of Calculated Long Term Coefficient of ARDL (7.1.1.0.0) Model
Taking the results in Table 5 into consideration, capital movement and money supply can‘t be interpreted so
that Theirs coefficient is meaningless as regards statistic value. Coefficient of interest variables increased positive
unlike our teoric expectations.
3.4 Short Term Analysis
Short term relation between variables again investigated by means of ARDL Error Correction Model based
on boundary test approach. ARDL model which is used in order to analyse short term relations is formulated as:
m

n

p

i 1

i 0

i 0

yt   0  1ECt 1   2i yt  i   3i i t  i   4i m2t  i 
r

k

i 0

i 0

  5i opent  i   6i tkt  i ut (7)
Here ECt-1 is error correction terms and it stands for one term lagged of error terms series which it is
obtained from long term relationship. Coefficient for this variable is point out duration of sort term deviation. If
this sign of coefficient is negative, deviations happen in short term between series is convergences to long term
balance value. If this sign of coefficient is positive, not convergences to long term balance value.
In this model lag length of veriables determineted just like long term. As a result of the transaction carried out, it
was decided that ARDL(5.1.0.0.0) was the short term ARDL model to be estimated and results are presented in
Table 6.

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AIC
m
1
2
3
4
5*
6
7
8

5,29
4,71
4,71
4,72
4,69
4,70
4,70
4,68

LM Test
0,00
0,05
0,07
0,02
0,29
0,41
0,36
0,00

n
0
1*
2
3
4
5
6
7
8
r
0*
1
2
3
4
5
6
7
8

AIC

LM Test

4,68
4,64
4,65
4,66
4,67
4,69
4,70
4,71
4,73

0,25
0,46
0,43
0,35
0,36
0,30
0,35
0,39
0,42

p
0*
4,65
0,52
4,61
0,48
1
4,66
0,44
4,62
0,50
2
4,65
0,43
4,63
0,60
3
4,69
0,42
4,64
0,15
4
4,69
0,48
4,65
0,65
5
4,71
0,45
4,66
0,66
6
4,69
0,41
4,68
0,63
7
4,71
0,31
4,68
0,70
8
4,73
0,27
4,70
0,67
k
0*
4,63
0,44
1
4,64
0,44
2
4,65
0,47
3
4,66
0,40
4
4,67
0,44
5
4,68
0,43
6
4,69
0,45
7
4,68
0,53
8
4,70
0,34
Table 6: Determination of Lag Length for Short Term Boundary Test
The result of estimated ARDL (5.1.0.0.0) model given in Table 7. Coefficient of ECt-1 (error correction
terms) is -0,72 in Table 7. This coefficient is negative and meaningful like expected. If coefficient‘s signs of error
correction terms is negative, model is convergences to long term balance level.
If this sign of coefficient is negative, deviations happen in short term between series is convergences to long
term balance value. If this sign of coefficient is positive, not convergences to long term balance value (Narayan ve
Smyth 2006). Therefore error correction of model is works. Although capital movements impact on economic
growth, like long term effect, is positive and according with theoritical expectation, statistically insignificant.

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Variables
yt-1
 yt-2
 yt-3
 yt-4
 yt-5
it
it-1
m2t
opent
tkt
ect-1
C
Diagnosis Tests
R2=0,70

R 2 =0,68

Coefficient
-0,3538
-0,3392
0,0961
-0,1636
-0,1825
-0,0319
0,0509
0,0152
0,0380
0,0002
-0,7274
-0,0587

t-statistic
-2,0340
-1,8955
0,5281
-1,4758
-2,2912
-1,9067
2,9609
0,1873
2,5170
0,4738
-3,6701
-0,2843

2BGAB(2 )=2,56(0,08)
2WDV=0,62(0,89)
2JBN=228,78(0,000)
2RRMKH(2)=0,13(0,87)

DW=1,98
F=26,80(0,00)
Note: Here, 2BGAB, 2WDV, 2JBN and 2RRMKH are respectively Breusch-Godfrey successive dependence, White
changing variance, Jarque-Bera normality test and Ramsey model establishment error statistics in regression. The
figures in parentheses reflect p-probability values
Table 7: The Results of ARDL (5.1.0.0.0) Model

Results
In this survey, capital movement impact on economic growth in Turkey has been investigated by using
monthly datum term of 1998:01-2009:09. In survey, boundary test approach which was developed by Pesaran has
been obtained cointegration findings between variables and based on this has been formed long and short term
ARDL models
According to obtained ampirical evidence, although in long and short term capital movement impact on
economic growth is positive, meaningless as regards statistic value. Therefore Coefficient of capital movement can‘t
be interpreted.
It is determined that opennes and interest variables positive effected on economic growth in the in long
term. It is observed that effect of interest one term lagged and opennes on economic growth is positive in short term.
In this study the relation between capital movement liberalisation and economic growth meaningless and
this is not according with economic literature.
This may be due to different reasons. Therefore this subject must be with other ampirical studies. So, It is
thought that be made open to the outside of the capital account‘s effect in financial crisis happen Turkey is
important.

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                <text>The Effect Of Capital Movements Liberalisation On Economical  Development: Boundary Test Approach</text>
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                <text>In this study, liberalization of capital movements‘ impact on economic growth in  Turkey has been investigated by the approach of the bounds testing. According to the empirical  findings of study, in both long and short-term, capital movements impact on economic growth is  statistically insignificant. This result is far from meeting our theoretical expectations.</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Forward and Backward Linkage Effects of the Energy Sector in Turkey
Mehmet MERCAN
mmercan48@hotmail.com
Abdullah ÖZDEMIR
abdullahozdemir@hotmail.com
Abstract: Energy sector has a great importance for producers and consumers. Energy sector has
been found as a leading sector as a result at the input-output analysis. This analysis has been done
by using input-output tables which are constructed by goverment Statistical Institude. Turkey is
dependent to other countries as energy. To satisfy the development in Turkish economy is only
available by reducing the depandencies to the other countries by the energy. Also it should be
continued as the leading sector.
Key Words: Input-Output Analysis, Energy Sector.

Introduction
Energy constitutes the most important causes of wealth through a variety of manifestations. Besides water,
coal. Petroleum and other valuable resources, the existence of wind and sun are sources of wealth as well.
Energy resources are used as inputs by other sectors in manufacturing industries. Therefore, it is important
to know the forward and backward linkages of this sector for the general situation of the economy.
The importance of energy resources has doubled in Turkey because of the energy crises experienced in
recent years. In this context, this study aims to find and interpret the forward and backward linkage effects of the
energy sector.
The purpose in this study is to observe the direct and indirect effects of input exchange between sectors and
their change over the years. The main data set used in the study is the Input-Output Flow Tables about Turkish
economy that is prepared by the Turkish Statistical Association (TUIK). The data for 1996, 1998 and 2002 are used
in the study.

The Importance of the Energy Sector
An increase in energy prices also increases the costs of inputs and product prices. Energy prices that are not
fixed influence inflation and increase the pressure for economic stagnation through affecting total demand. The more
important the use of energy resources in an economy the higher the inflationist pressure against the increases in oil
prices (LeBlanc and Chinn, 2004: 8).
Increases in the prices of energy resources raise the costs of airways, transportation and the costs of the
companies that produce chemical products and therefore, lead to inflation. For this reason, any change in energy
prices is watched very closely (Bennet, 2003: 1).
Plants in the energy sector should be planned long before the demand for energy exists. Otherwise, delays in
planning and investments raise the cost of energy and adversely affect economic activities and societal wealth. It is
imperative to determine the potential needs in the energy sector at least ten years in advance, decide the projects to
cover the increasing demand, and make necessary political decisions (Gerek, 1998: 370-371).
In developing countries like Turkey, the sectors that produce energy have important structural ties with
other sectors. Especially electricity sector in Turkey positively affect economic growth because of its backward
linkage. In today‘s modern societies, electrical energy used increasingly ignite other sectors of the economy by
providing considerable amounts of inputs. The insufficiency of electric energy supply that should increase parallel to
economic growth adversely affects economic growth as well as prevents the stimulatory effect on the economy
(Terzi, 1998: 63).

Input-Output Analysis

685

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The input-output model is a model that considers the relationship between the level of activities in the all
sectors of economy (Akkaya and Pazarlioglu, 2000: 14).
The input-output models are simple mathematical equilibrium models that quantitatively analysis the
mutual linkages between production and consumption units on the whole economy scale in a multi-sectoral way.
Different from micro economical analysis that focuses on the behaviors of firms and households and macroeconomic analysis that analyzes the whole economy, the input-output analysis‘ focus is on sectors and good
exchanges between sectors. The input-output models provide an opportunity to quantitatively analyze the production
and use of outputs of productive sectors on whole economical and sectoral basis and fulfill and important gap
between partial and total analyses especially in the analysis of empirical problems (Aydogus, 1999: 1-2).
In the input-output model, under the assumption that the share of technology or inputs in production costs is
constant, the equilibrium prices of goods and services produced in every sector can be obtained as the prices of main
inputs (Aydogus, 1993: 36).
According to Hirschman, the effects of forward and backward linkages that reflect sectors‘ ―feeding‖ and
―stimulating‖ powers on other sectors must be considered (Hirschman, 1958: 9). In Hirschman‘s unbalanced growth
model, one of the most important factors that restricts economic growth is the ability of decision making, especially
the ability to take an investment decision.
Inferring from Hirschman‘s ideas, a quadruple grouping can be developed. The categories of this grouping
that considers forward and backward linkages together can be summarized as follows:
Category 1: Sectors that have high forward and backward linkage effects.
Category 2: Sectors that have high backward but low forward linkage effects.
Category 3: Sectors that have high forward but low backward linkage effects.
Category 4: Sectors that have low backward and forward linkage effects.
The above arrangement shows sectoral investment priorities from the lowest to the highest. According to
this, the sectors in the first category constitute the key sectors in the economy and have the highest investment
priority. The scarce resources should primarily be devoted to these sectors. If there are still unused resources, then,
they should be devoted to the sectors in the second category. Sectors in the III. and IV. categories come last in terms
of investment priorities, that is, these sectors are expected to be stimulated by the key sectors (Aydogus, 1999: 100101).

The Forward and Backward Linkage Effects for 1996, 1998, and 2002
The 1996 and 1998 input-output tables prepared by TUIK consist of total 97 sectors and the 2002 table
consists of 59 sectors. The forward and backward linkage effects are as follows in terms of sectoral arrangement. The
Table consists of 97 sectors but to observe it more clearly it is divided. In Table 1, there are Forward Linkage Effects
(FLE) and Backward Linkage Effects (BLE) of 24 sectors.

686

�Sectors
1-Growing of cereals and other crops n.e.c.
2-Growing of vege- tables, horticultural specialities
and nursery products
3-Growing of fruit, nuts, beverage and spice crops
4- Farming of animals
5-Agricultural and animal husbandry service activities
(excl. veterinary act.)
6-Forestry, logging and related service activities
7- Fishing
8- Mining of coal and lignite
9-Extraction of crude petroleum and natural gas
10- Mining of metal ores
11- Quarrying of stone, sand and clay
12- Mining and Quarrying n.e.c.
13- Production, proces- sing and preserving of meat and
meat products
14-Processing and preserving of fish and fish products
15- Processing and preserving of fruit and vegetables
16- Manufacture of vegetable and animal oils and fats
17-Manufacture of dairy products
18-Manufacture of grain mill produtcs, starches and
starch products
19-Manufacture of preparad animal feeds
20-Manufacture of bakery products

1996
ĠBE GBE
5,89 1,66

1998
ĠBE GBE
5,07 1,42

1,21
1,54
2,53

1,50
1,20
1,93

1,23
1,89
2,00

1,31
1,14
1,74

1,92
1,87
1,16
1,65
4,31
1,26
1,33
1,23

2,13
1,22
1,41
1,33
1,23
1,61
1,40
1,31

1,42
1,72
1,15
1,50
1,32
1,16
1,38
1,24

1,78
1,17
1,26
1,44
1,25
1,45
1,27
1,23

1,72

2,49

1,55

2,07

1,11
1,13
1,54
1,10

1,86
1,96
2,33
2,19

1,02
1,37
1,53
1,21

1,74
1,70
2,06
1,87

1,57
1,33
1,02

2,14
2,32
2,16

1,55
1,27
1,03

1,81
2,04
2,03

Sectors
Agriculture, hunting and related service activities
Forestry, logging and related service activities
Fishing, operating of fish hatcheries and fish farms; service activities incidental to fishing
Mining of coal and lignite; extraction of peat
Extraction of crude petroleum and natural gas; service activities incidental to oil and gas
extraction excluding surveying
Mining of uranium and thorium ores
Mining of metal ores
Other mining and quarrying
Manufacture of food products and beverages
Manufacture of tobacco products
Manufacture of textiles
Manufacture of wearing apparel; dressing and dyeing of fur
Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and
footwear
Manufacture of wood and of products of wood and cork, except furniture; manufacture of
articles of straw and plaiting materials
Manufacture of pulp, paper and paper products
Publishing, printing and reproduction of recorded media
Manufacture of coke, refined petroleum products and nuclear fuels
Manufacture of chemicals and chemical products
Manufacture of rubber and plastic products
Manufacture of other non-metallic mineral products

Table 1: 1996 ,1998 ve 2002 Years Total Backward and Forward Linkage Effect of First Twenty Sector (Direct+Indirect)
(Tables was calculated by using the Input-Output Table 1996, 1998 ve 2002 Years)
IBE :Forward linkage effect
GBE:Backward linkage effect

2002
ĠBE GBE
1,86 3,66
1,35
1,64
1,60

1,45
1,06
1,37

1,05
1,00
1,92
2,14
2,95
2,79
2,98
3,21

3,24
1,00
1,16
1,82
2,52
1,14
3,81
1,32

2,94

1,69

2,88
2,59
2,65
2,30

1,68
3,99
1,65
2,81

2,06
2,69
2,66

5,82
2,63
2,39

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

21- Manufacture of sugar
22-Manufacture of cocoa, chocolate, sugar confertionery and other
food products n.e.c.
23-Manufacture of alcoholic beverages
24- Manufacture of soft drinks; production of mineral waters
25- Manufacture of tobacco products
26-Manufacture of textiles
27- Manufacture of other textiles
28-Manufacture of knitted and fabrics and articles
29- Manufacture of wearing apperel, except fur apparel
30-Dressing and dyeing of fur; manufacture of articles of fur
31- Tanning and dressing of leather; manufac.of luggage, handbags
&amp; harness
32-Manufacture of footwear
33-Sawmilling and planing of wood
34- Manufacture of wood and of products of wood and cork

1,37

2,18

1,33

1,94

1,43
1,24
1,27
1,08
2,96
1,26
1,13
1,13
1,39

2,02
1,56
2,24
2,00
2,45
2,13
2,49
2,37
2,45

1,34
1,16
1,08
1,08
2,67
1,22
1,07
1,53
1,01

1,88
1,51
2,10
1,83
1,76
1,68
1,76
1,88
1,86

1,91
1,14
2,19
1,43

2,46
2,55
2,42
2,17

1,69
1,07
2,06
1,45

1,96
2,00
2,08
1,98

35- Manufacture of paper and paper products
36-Publishing

3,41
1,09

2,10
1,86

2,39
1,09

1,69
1,53

37- Printing and service activities related to printing
38- Manufacture of coke, refined petroleum produtcs
39- Manufacture of basic chemicals, plastics in primary &amp; synthetics
rubber
40- Manufacture of fertilizers and nitrogen compounds

1,51
5,79

2,10
1,55

1,52
3,92

1,62
1,13

4,89
1,77

2,16
2,16

1,79
1,30

1,58
1,66

Manufacture of basic metals
Manufacture of fabricated metal products, except machinery and equipment
Manufacture of machinery and equipment n.e.c.
Manufacture of office machinery and computers
Manufacture of electrical machinery and apparatus n.e.c.
Manufacture of radio, television and communication equipment and apparatus
Manufacture of medical, precision and optical instruments, watches and clocks
Manufacture of motor vehicles, trailers and semi-trailers
Manufacture of other transport equipment
Manufacture of furniture; manufacturing n.e.c.
Recycling
Electricity, gas, steam and hot water supply
Collection, purification and distribution of water
Construction
Sale, maintenance and repair of motor vehicles and motorcycles; retail sale
services of automotive fuel
Wholesale trade and commission trade, except of motor vehicles and motorcycles
Retail trade, except of motor vehicles and motorcycles; repair of personal and
household goods
Hotels and restaurants
Land transport; transport via pipelines
Water transport

Table 2: 1996 ,1998 ve 2002 Years Total Backward and Forward Linkage Effect of Second Twenty Sector (Direct+Indirect)
(Tables was calculated by using the Input-Output Table 1996, 1998 ve 2002 Years)

688

2,35

5,74

2,60
1,94
1,17
2,40
2,21
1,57
2,52
1,73
2,85

2,17
2,27
1,21
1,96
1,98
1,20
1,92
1,37
1,26

3,25
2,98
1,55
2,56

1,02
4,98
1,38
1,54

2,24
2,13

2,62
4,59

1,86
2,53

3,14
1,57

2,10
1,80

4,76
1,89

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Sectors
41-Manufacture of pesticides, other agro-chemicals and paints, varnishes
42-Manufacture of pharmaceuticals, medicinal chemicals &amp; botanical
products
43-Manufacture of cleaning materials, cosmatics and other chemicals &amp;
fibres
44- Manufacture of rubber products
45- Manufacture of plastic products
46-Manufacture of glass and glass products
47-Manufacture of ceramic products
48-Manufacture of cement, lime and plaster related articles these items
49- Cutting and finishing of stone and man. of other non-metallic
mineral products n.e.c.
50-Manufacture of basic iron and steel
51-Manufacture of basic precious and non- ferrous metals
52- Casting of metals
53-Manufacture of fabricated metal products, tanks, reser.&amp;steam gen.
54- Manufacture of other fabricated metal products; metal working
services
55-Manufacture of general purpose machinery
56- Manufacture of special purpose machinery
57- Manufacture of domestic appliances n.e.c.
58-Manufacture of office, accounting and computing machinery
59-Manufacture of electrical machinery and apparatus n.e.c.
60-Manufacture of radio, television and communication equip- ment &amp;
apparatus

1996
ĠBE GBE
1,49 2,01

1998
ĠBE GBE
1,32 1,59

1,68

1,84

1,27

1,54

2,19
1,47
1,64
1,32
1,08

2,06
2,09
2,31
1,83
1,79

1,67
1,39
1,56
1,28
1,10

1,72
1,72
1,69
1,61
1,58

1,24

1,83

1,44

1,60

1,06
4,61
3,05
1,13
1,16

1,54
2,26
2,13
2,18
2,24

1,04
3,28
1,80
1,28
1,50

1,68
1,81
1,74
1,67
1,69

2,40
1,51
2,85
1,10
1,59
1,73

2,10
2,01
2,02
2,04
1,61
2,15

1,81
1,15
1,37
1,06
1,05
1,26

1,73
1,68
1,76
1,57
1,49
1,66

1,82

1,81

1,20

1,44

Sectors
Air transport
Supporting and auxiliary transport activities; activities of travel agencies
Post and telecommunications
Financial intermediation, except insurance and pension funding
Insurance and pension funding, except compulsory social security
Activities auxiliary to financial intermediation
Real estate activities
Renting of machinery and equipment without operator and of personal and
household goods
Computer and related activities
Research and development
Other business activities
Public administration and defence; compulsory social security
Education
Health and social work
Sewage and refuse disposal, sanitation and similar activities
Activities of membership organisation n.e.c.
Recreational, cultural and sporting activities
Other service activities
Private households with employed persons

Table 3: 1996 ,1998 ve 2002 Years Total Backward and Forward Linkage Effect of Third Twenty Sector (Direct+Indirect)
(Tables was calculated by using the Input-Output Table 1996, 1998 ve 2002 Years)

689

2002
ĠBE GBE
2,68 1,36
2,41

3,38

2,20
1,91
1,64
2,54
1,59

2,17
4,47
1,26
1,38
2,33

2,20

1,18

1,95
2,90
1,98
2,06
1,60

1,27
1,33
4,64
1,02
1,14

2,32
2,37
2,23
2,14
2,23
1,00

1,12
1,43
1,46
1,70
1,11
1,00

�Sectors
61-Manufacture of medical, precision &amp;optical instruments, watches and
clocks
62- Manufacture of motor vehicles, trailers and semi-trailers
63- Building and repairing of ships, pleasure &amp;sporting boats
64-Manufacture of railway and &amp;tramvay lokomo- tives &amp; rolling stock
65-Manufacture of aircraft and spacecraft
66-Manufacture of transport equipment n.e.c.
67-Manufacture of furniture
68- Manufacturing n.e.c.
69-Production, collection and distribution of electricity
70-Manufacture of gas; distribution of gaseous fuels
71-Collection, purification and distribution of water
72-Construction
73-Sale, maintenance and repair of motor vehicles, motorcycles; retail sale
of fuel
74-Wholesale trade and commission trade, except of motor vehicles &amp;
motorcyles
75-Retail trade, repair of personal and household materials
76-Hotels; camping sites and other provision of short-stay accommodatin
77-Restaurants, bars and canteens
78-Transport via railways
79-Land transport; transport via pipelines
80-Water transport
81- Air transport
82-Supporting and auxiliary transport activities; activities of travel agencies
83-Post and telecom- nications
84-Financial intermedediation, except insurance and pension funding
85- Insurance
86-Real estate activities
87-Renting of machinery and equipment without operator &amp; of personal and
household goods
88-Computer and related activities
89- Research and development
90- Other business activities
91-Education
92-Health and social work services
93-Activities of membership organizations n.e.c
94- Recreational, cultural and and sporting activities
95-Other service activities
96- Public services
97-Ownership of dwelling

1996
ĠBE
1,29

GBE
1,82

1998
ĠBE
1,04

GBE
1,56

1,60
1,10
1,30
1,18
1,39
1,07
1,21
4,38
1,16
1,53
1,06
2,40

2,15
1,48
1,93
1,16
2,25
2,24
1,96
1,45
1,77
1,25
2,02
1,45

1,21
1,01
1,02
1,02
1,08
1,08
1,05
3,69
1,18
1,38
1,16
2,17

1,72
1,54
1,48
1,23
1,66
2,01
1,27
1,35
1,18
1,19
1,67
1,29

5,87

1,39

3,54

1,26

2,65
1,61
1,40
1,24
6,05
2,12
1,17
1,15
2,19
5,34
1,34
1,51
1,08

1,46
1,81
1,91
2,20
1,54
1,80
1,97
2,28
1,38
1,48
1,74
1,51
1,60

2,97
1,23
1,80
1,07
5,11
1,70
1,20
1,03
2,22
5,23
1,20
1,55
1,18

1,25
1,69
1,70
1,58
1,35
1,48
1,55
1,86
1,15
1,43
1,44
1,52
1,62

1,11
1,28
3,42
1,02
1,04
1,00
1,38
1,21
1,00
1,00

1,95
1,14
1,75
1,74
1,59
1,47
1,53
1,63
1,00
1,31

1,13
1,30
2,92
1,05
1,03
1,04
1,47
1,10
1,00
1,00

1,53
1,61
1,48
1,53
1,29
1,48
1,48
1,46
1,00
1,25

Table 4:1996 ,1998 ve 2002 Years Total Backward and Forward Linkage Effect of Third Twenty Sector
(Direct+Indirect)
(Tables was calculated by using the Input-Output Table 1996, 1998 Years)
.
If the total increase in production caused by the increase in demand by one unit in a sector can be defined as
that sector‘s backward linkage effect and the increase in a certain sector‘s production by one unit increase in last

demand can be defined as that sector‘s forward linkage effect.
In this context, the study includes calculations of both forward and backward linkage effects for
1996, 1998 and 2002.

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
When the tables 1,2,3, and 4 above are analyzed, it is seen that sectors with high forward linkage effects
have an important place for creating supply to other sectors. Below are the sectors with high forward linkage effects.
As can be seen in Tables 1,2,3, and 4 for the year 1996, the sectors with the highest forward linkage effects
are the 79th sector highway transportation (6,05), 1 st sector grain and vegetable plantation (5,89), 74 th sector
wholesale and trade brokering (5,87), 38 th sector coke furnace and refined petroleum product manufacturing (5,78),
84th sector intermediary financial institutions (5,34), 39 th sector main chemical materials, synthetic rubber and plastic
raw material production (4,88), 50th sector iron-steel industry (4,61), 69th sector production and distribution of
electricity (4,38), 9th sector crude oil and natural gas production (4,31), 35 th sector paper and paper product
production (3,40), 51st sector main metal industry other than iron and steel (3,04), and 26th sector textile threads and
weaving (2,96). As can be seen the other sectors of the economy used the most input from highway transportation
and agricultural sector. The energy sub-sectors such as refined petroleum products and electricity production and
distribution are among the first five sectors in terms of providing inputs to other sectors.
As can be observed in Tables 1,2,3, and 4, the highest forward linkage effect sectors for 1998 total (direct
and indirect) are; 84th sector intermediary financial institutions and auxiliary activities (5,22), 79 th sector highway
transportation (5,11), 1st sector grain and vegetable plantation (5,07), 38 th sector coke furnace and refined petroleum
product production (3,92), 69th sector electricity production and distribution (3,69), 74 th sector wholesale and
brokering (3,53), 50th sector iron and steel industry (3,27), 75 th sector retail, and the repair of personal and home
equipment (2,96), 26th sector textile thread and weaving (2,67), and 35th sector paper and paper product
manufacturing (2,39).
The sectors with highest forward linkage effects for 2002, as can be seen in Tables 1,2,3, and 4, are;
clothing manufacturing (3,21), electricity, gas, steam and hot water production and distribution (2,97), textile
manufacturing (2,97), food and drink manufacturing (2,95), leather tanning and processing; suitcase, handbag,
saddler, harness and shoe manufacturing ((2,93), research and development services (2,90), wood and cork products
manufacturing (2,88), furniture production (2,84), tobacco products manufacturing (2,79), plastic and rubber
production (2,69), airway transportation (2,68).
When direct forward linkage effects for 1996 are analyzed, highway transportation, grain and other plants
plantation, wholesale and trade brokering coke furnace, refined petroleum products and intermediary financial
institutions are the five sectors with highest sector linkage effects.
The highest forward linkage effects for 1998 includes the first five sectors including the production of grain
and other plants, highway transportation, intermediary financial institutions, wholesale trade and trade brokering,
electricity production and distribution.
The two sub-sectors of the energy sector are among the first five sectors with the highest forward linkage
effects in 1996 and 1998.
In 2002, food and drink production, clothing manufacturing, fur processing and dying, wood and cork
products production, electricity, gas, steam and hot water production and distribution and research and development
services are the first five sectors with highest direct forward linkage effects.
The sectors with the highest forward linkage effects are important for reducing dependency on foreigners
since they can be used as inputs in other sectors. In terms of their use as inputs in 1996 and 1998 highway
transportation, agriculture and electricity production and distribution, petroleum refinery, iron and steel industry,
textile, paper products manufacturing, wholesale trade and trade brokering sectors are remarkable. In 2002, clothing
manufacturing, electricity production and distribution, petroleum, textile, leather tanning and processing, shoe
manufacturing, tobacco, research and development services, wood and cork products manufacturing, plastic and
paper products production, and airway transportation rather than highway transportation came forward.
When we look at the years 1996, 1998, and 2002 together, the sub-sectors of the energy sector such as
petroleum refinery, electricity production and distribution,, cruse oil production, coal and nuclear energy production,
and natural gas production are among the first sectors that provide inputs to other sectors.
The sectors with the highest backward linkage effects are the sectors which have influence for stimulating
the level of production in other sectors. That is, since these sectors demand inputs from other sectors, they stimulate
the economy.
When the backward linkage effects for 1996, 1998, and 2002 are analyzed, the high linkage effects of the
sub-sectors of the manufacturing industry stand out. It is well known that the manufacturing industry is very
important in stimulating the level of production in other sectors in developing countries.
When 1996 backward linkage effects are examined, meat processing and keeping, clothing, leather tanningsuitcase, handbag production, textile threads-weaving sectors are the first five sectors.

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In terms of backward linkage effects for 1998, metal industry, chemical materials production, wholesale
trade and trade brokering, the activities of financial institutions and highway and pipeline transportation are the first
five sectors.
The sectors with the highest backward linkage effects in 1996 are shoe manufacturing, meat processing and
keeping, clothing manufacturing, leather tanning-suitcase, handbag manufacturing, and textile thread and weaving
and finishing. The sectors with the highest backward linkage effects in 1998 are non-alcoholic beverage and spring
water production, timber and hardwood industry, meat processing and keeping, vegetative-bestial oil, animal food
production. As seen, the sectors that are the sub-sectors of the manufacturing industry are the sectors with the highest
backward linkage effects in 1996 and 1998.
The five sectors with the highest backward linkage effects in 2002 (direct and indirect) are chemical
material production, main metal industry, electricity, gas, steam and hot water production and distribution, highway
and pipeline transportation, and wholesale trading and trade brokering.
The sectors with high backward and forward linkage effects are described as the locomotives of an
economy. When the similar studies are reviewed, it was concluded that the manufacturing industry in the 1980s and
1990s is the locomotive (pioneer) sector. The locomotive sectors in 1996 are plastic products production and iron
and steel industries. In 1998, the locomotive sectors are chemical products, synthetic rubber and plastic material
manufacturing, iron and steel industry and metal industry.
The locomotive sectors in 2002 are electricity, gas, steam and hot water production and distribution, textile
products manufacturing, plastic and rubber products manufacturing, coke coal, refined petroleum products and
nuclear fuel production and food and beverage production.
Even though the manufacturing sector was the locomotive sector in the previous years, in 2002, the energy
sector became a locomotive sector and contributed to economic revival.

Conclusion
In the years analyzed, the sub-sectors of the manufacturing industry in 1996 and 1998 are the sectors with
high direct and total backward linkage effects. In 2002, it is seen that the energy sector has both high backward and
forward linkage effects. When the Tables above are analyzed in detail, the sub-sectors of the energy sector score high
in terms of both backward and forward linkage effects. According to Hirschman‘s categorization, the sectors with
high backward and forward linkage effects at the same time are described as the locomotive sectors. Therefore, the
sub-sectors of the energy sector in 2002 fit in this category.
As a result, investment in the energy sector in Turkey should be increased. In this context, studies aiming to
reduce dependency on foreign powers in energy should be done. Especially, the industrial model based on the fossil
fuel increases dependency. Turkey can support the other sectors only if can it use resources such as wind, solar and
hydrologic energy.

References
AKKAYA, ġ., PAZARLIOĞLU, M. V., (2000). Ekonometri I, Berk Masa Üstü Yayıncılık, Ġzmir, 581 s.
AYDOĞUġ, O., (1993). Türkiye Ekonomisinde Maliyet-Fiyat ĠliĢkileri Sektörel Fiyat OluĢumu ve Enflasyon, 3. Ġzmir Ġktisat
Kongresi, Sektörel GeliĢme Stratejileri, Ġzmir, 35-48 ss.
AYDOĞUġ, O., (1999). Girdi-Çıktı Modellerine GiriĢ, Gazi Kitabevi, Ankara, 121 s.
BENNETT, R. F., (2003). 10 Facts About Oil Prices, Joint Economic Committee, Economic Update, 4 p.
TÜĠK, (1985). Türkiye Ekonomisinin Input-Output Yapısı 1985, TĠK Yayınları, Ankara, 87 s.
TÜĠK, (1994). Türkiye Ekonomisinin Input-Output Yapısı 1990, TĠK Yayınları, Ankara, 89 s.
TÜĠK, (2001). Türkiye Ekonomisinin Input-Output Yapısı 1996, TĠK Yayınları, Ankara, 141 s.
TÜĠK, (2004). Türkiye Ekonomisinin Input-Output Yapısı 1998, TĠK Yayınları, Ankara, 127 s.

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LEBLANC, M.; and CHINN, M., (2004). Do High Oil Prices Presage Inflation? The Evidence from G-5 Countries, UC Santa
Cruz Economics Department 2000-05 Working Paper Series, 25 p.
TERZĠ, Ġ., (1998). Türkiye‘de Elektrik Tüketimi ve Ekonomik Büyüme ĠliĢkisi: Sektörel Bir KarĢılaĢtırma, Ġktisat-ĠĢletme ve
Finans Dergisi, Ġstanbul, ss. 62-71.

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                <text>Energy sector has a great importance for producers and consumers. Energy sector has  been found as a leading sector as a result at the input-output analysis. This analysis has been done  by using input-output tables which are constructed by goverment Statistical Institude. Turkey is  dependent to other countries as energy. To satisfy the development in Turkish economy is only  available by reducing the depandencies to the other countries by the energy. Also it should be  continued as the leading sector.</text>
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                    <text>1st International Conference on Foreign Language Teaching and Applied Linguistics
May 5-7 2011 Sarajevo

Film Making and Language Learning
Prof. Dr. Visam Mansur
Department of English Language and Literature
Beykent University, Istanbul-Turkey
visammansur@gmail.com
Abstract: Theodosakos in The Director in the Classroom: How Filmmaking
Inspires Learning argues that filmmaking ―enables students to explore any
curriculum subject through the active process of making a film about it‖ (p.
30). Furthermore, while Simkins (2007), David Nunan (2004), emphasize the
tendency to teach language through group based projects, Joyce, etal (2000)
establish the essentiality of such group based projects on developing and
enhancing communication skills. In my paper I will examine the impact of film
making activities on English Language learning in classes of mine over a
period of few years where most students were hesitant to produce language
effectively at the onset of the course. The paper will view the cons and pros of
film making activities with emphasis on the potential advantages it carries for
the leaner in terms of enhancing learner‘s pronunciation, vocabulary
acquisition, awareness of language structures and sound language production.
Key Words: Language acquisition, cinema, scriptwriting

Introduction
The best possible kind of input required for language acquisition and learning has been at the
center of arguments and research by so many scholars (Krashen, 1987; Pinker 1994; Morgan 1986;
Ingram 1989). For instance Stephen Krashen proposes that language "Acquisition requires meaningful
interaction in the target language." (1987: 6) Krashen maintains further that "The best methods are
therefore those that supply 'comprehensible input' in low anxiety situation." (1988: 7)
Most educators would agree that the following input items enhance both acquisition and
learning:




Input should be comprehensible introduced with simple vocabulary and clear
instructions in standard language
Input should be interesting

Such optimal input helps reduce the so called ―Affective Filter‖ and enhance students‘ ability
at language acquisition and production. Krashen maintains ―Low motivation, low self-esteem, and
debilitating anxiety can combine to 'raise' the affective filter and form a 'mental block' that prevents
comprehensible input from being used for acquisition. In other words, when the filter is 'up' it impedes
language acquisition. On the other hand, positive affect is necessary, but not sufficient on its own, for
acquisition to take place.‖ (1988: 68)

Film Making
The term sounds daunting and interesting at the same time. Daunting because it requires well
prepared teachers and students willing to take the challenge involved in such an activity. Interesting
because it involves plenty of what is needed to learn and produce language in new environments:
collaborativity (teamwork), creativity, art, performance and multimedia usage.
My story with teaching English via movie making started few years ago in a beginner‘s class
in the English department where I was working then. I observed that students were timid and reluctant
to produce English language effectively as they were conscious of the processes of both acquisition and
production. What strikes me about the class is the fact that most of the students were well versed in a
very passive way of the language structure. They all know in theory the various verb forms; they know
the basic sentence structure and know well about the various irregularities that come up with English.
The problem we faced in the class was that students would not talk in English and when they do so
they do it horribly with the basic structural rules violated.
It was then that I decided to resort to the old-new method of using drama in teaching to
simulate a somewhat natural atmosphere for language acquisition and production. In order to make the
activity as natural and spontaneous as possible, I introduced students first to computer software that
helps generate a screen script and guide the students step by step to generate characters‘ descriptions
and needed objects‘ details.

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The software I chose for this task is called CELTX. It is easily available for download online
and is usually offered for free. Introducing the students to the software is not that difficult for both
teacher and student. Furthermore, the activity of introducing the students to the software constitutes a
natural environment for enhancing students‘ acquisition of program related jargon and helping a lot in
lowering the so called affective filter that inhibits language learning and production.

Key Features of CELTX
The software is neither made for English language teaching nor for teaching creative writing.
What it does is simply to guide the students, help organize the student‘s ideas and help leading the
students to include what is needed for a script in a very natural and stimulating environment.
For instance as the students begin to write, the software makes them aware of six basic
elements needed for the script: Scene Heading, Action, Character, Dialogue, Parenthetical, Transition,
It is observed that these elements in the program create the control environment needed by the learners
to help them start and finish their scripts. These also function as subtle and constant instructor
reminding the students and guiding them to accomplish their desired task in the standard format
without them having to waste time thinking of the structure of the script. In this respect the software
spares the students the time needed for structuring the activity in favor of focusing on the creative and
linguistic sides of the activity.
As a professional teacher whose aim is to instruct and lead his students to learning rather than
drilling those in the conventional manner CEKTX through its modules that explore in details aspects of
character and objects included in the script helps students generate the language needed to fulfill the
requirements of their scripts using the maximum language they can afford. The Character Module for
instance requires that the students describe a given character in the following terms: Name, Actor,
Description, Media (image), Age, Hair, Eyes, Height, Weight, Distinguishing Features, Key Character
Traits, Principal Function, Goal, Plan to Achieve Goal, Family Background, Habits, Vices, Education,
Personality, Likes, and Dislikes. Another module that guides the students to detail the Scene Heading
requires students to generate text describing the scene under the following headings: Description, the
central event of the scene, the effect of the event on the plot, the characters in the scene, the setting of
the scene, time of the scene, the mood of the scene, the protagonist, the antagonist, the goal of the
protagonist, the goal of the antagonist, the way the antagonist achieves her goal, the way the
protagonist achieves her goal.
In short such modules by breaking down the process of perceiving a scene, character, or event
into its multiple components help the language learners approach a full scene step at a time, thus
making language production easier and systematic.

Scenario Writing
Theodosakos in The Director in the Classroom: How Filmmaking Inspires Learning argues
that filmmaking ―enables students to explore any curriculum subject through the active process of
making a film about it‖ (2009:30). As far as language learning is concerned, the first step to film
making lies in writing its script. Making a film involves creating it from an idea and turning the idea
into a producible script. The students are given CELTX and are asked to generate a short script made of
as many scenes needed to tell a simple story. As the students already learnt while experimenting with
the software that the basic components of a script are the scene heading, the action, the character and
the dialogue; each proceeds in generating a script in accordance with the dictates of the software and
the student‘s creative imagination.
It is observed that students receive the activity of creating a script with some reluctance and
fears of failing their teacher and themselves. But like all activities that require multitasking and
collaborative presence, teacher‘s proper instructions and constant encouragement dispel students‘
misgivings and before the elapse of the first few weeks in the course the students get really indulged in
the activity and begin to enjoy it.
The role of the teacher at this junction is to keep checking students‘ projects and provide
feedback in terms of suggestions and language corrections when needed. Also students are encouraged
to edit each others projects as it is a wise practice to split the class into several groups of fives or sixes
as such groups will have to relay on each other when they move from the individual process of writing
scripts to managing and filming them.

Camera and Collaborative Learning
While Simkins (2007), David Nunan (2004), emphasize the tendency among educators to
teach language through group based projects; Joyce, Weil, and Calhoun (2000) establish the
essentiality of such group based projects on developing and enhancing communication skills. Such

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May 5-7 2011 Sarajevo
findings come true when students engage each other in performing their and each others scripts. This
part of the activity engages the two basic skills of filming , and language acquisition and production as
the students practice:
 what they learnt about simple filming techniques and camera angles
 language as they memorize/improvise and act their roles in English
 language while negotiating with their partners in the processes of writing,
editing, producing and filming
Once the scripts are written and activities are shared among students involved, the teacher
encourages students to read about the basic techniques of camera shots and angles. It is preferable that
teachers point their students to simple texts in English that elaborate on such activities to make sure
that the students acquire additional jargon related to camera and its manipulation in filming. Terms
such as long shot, establishing shot, medium shot and close up shot among several others will keep
recurring all the time and will become part of the jargon of the students.
In short filming as a multitasked activity provides learners with motivation, self-confidence,
low level of anxiety and contributes more effectively to language acquisition, retention and production.

Computer Editing
To make the film aesthetically presentable it needs editing by computer software. The market
is saturated with such movie editing programs, the simplest and most accessible among which is
Windows Movie Maker. This software is part of Windows with the exception of Windows 7 and can be
downloaded for free form Microsoft Windows site if not available on one‘s computer.
By asking the students to familiarize themselves with the software before coming to edit their
films students will find themselves again learning a computer skill and language, too. Going through
the help files and accessing various additional e-files on how to run and use the program act as a
language teacher in quite a natural condition. The internet is replete with sites like You Tube and Ehow that show help videos in English on almost any conceivable topic.
Such editing programs enable students to add the various shots taken earlier in order or at
random and place them in the time sequence they should be in. The program enables the student to edit
and cut unwanted scenes, add and delete music and sound effects and furthermore add titles, captions
and subtitles.
By asking the students to include as many effects as the program and the capacity of the
students‘ permit, the students are likely to get more engaged in the film, its language and its metalanguage in real and natural environment. After all Krashen rightly maintains that ―language
acquisition does not require extensive use of conscious grammatical rules, and does not require tedious
drill.‖ (1987:6)

Conclusion
A lot has been said about the effectiveness of media and multimedia in language acquisition
and learning. While Clark (1983) contends that there is little or no evidence to show the positive effects
of multimedia on language acquisition and production, educators such as Liu (1995), Johnston (1995),
Borras (1994), Garza (1991), Vanderplank (1988), Salomon (1979) among others accentuated the
various functionality of multimedia in helping learners cope with language learning and language
production. Though most of those educators worked on the effect of watching films with or without
subtitling in the target language, very little has been said on the advantages of utilizing film making
and script editing software in enhancing language acquisition and production. Theodosakos (2009), for
instance, advocated the potentiality of teaching any subject matter in the curricula via simulating film
making and direction in the classroom. The over all observation of educators and language teachers
who wrote on collaborative learning is that film and multimedia usage in the language classroom show
increased percentage of language acquisition and production in comparison to classroom practices
where conventional methods persisted in teaching.
My empirical observations over the years showed me reluctant and timid students with poor
performance records in previous courses and classes taught in less interactive ways produce promising
scripts coupled with eloquent and impressing dialogues and performances. Naturally, for the activity to
yield effective results, it always requires a dedicated student equipped with perseverance and desire to
learn. From my observation, the activities of script writing, filming, and film editing have always
triggered the learner‘s desire for language acquisition and production.

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References
Borras, I. and Lafayette, R. (1994). Effects of multimedia courseware subtitling in the speaking
performance of college students of French. The Modern Language Journal ,78 (1): 61-75.
Clark, R. (1983). Reconsidering research on learning from media. Review of Educational Research, 53
(4): 445-59.
Garza, T. (1991). Evaluating the use of captioned video materials in advanced foreign language
learning. Foreign Language Annals, 24, 239-48.
Ingram., D. (1989). First language acquisition: Method, description, and explanation, New York:
Cambridge University Press.
Johnston, J. and Milne, L. (1995). Scaffolding second language communicative discourse with teachercontrolled multimedia. Foreign Language Annals, 28 (3): 315-29.
Joyce, B. etal. (2000) Models of teaching, New York: Plenum Press.
Krashen, D. (1987). Principles and practice in second language acquisition, London: Prentice-Hall
International.
Krashen, D. (1988). Second language acquisition and second language learning, London: Prentice-Hall
International.
Liu, M. and Reed, W. (1995). The effect of hypermedia assisted instruction on second language
learning. Journal of Educational Computing Research, 12 (2): 159-75.
Morgan, L. (1986). From simple input to complex grammar, Cambridge, MA: Bradford Books/MIT
Press.
Nunan, D. (2004). Task-based language teaching, Cambridge: Cambridge University Press.
Pinker, S. (1994). The language instinct, New York: Morrow.
Salomon, G. (1979). Interaction of media, cognition and learning, Washington, DC: Jossey-Bass.
Simkins, S. (2007). Encouragıng faculty involvement in the scholarship o teaching and learning. A
cademic Leader, 23 (6):1-26
Theodosakos, N. (2009). The director in the classroom: How filmmaking inspires learning, Penticton:
Tech4learning Publishing.
Vanderplank, R. (1988). The value of teletext sub-titles in language learning. English Language
Teaching Journal, 42 (4): 272-81.

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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

The Power of Words in Communicating Effectively
Çağrı Tuğrul Mart
Ishik University
tugrulbey@hotmail.com
Abstract: Words are the keys to the heart. Beautifully crafted words have the power to
captivate the mind of anybody. A sweet-tongued man is loved by one and all. Audience is
always attracted towards those who can speak efficiently and effectively. Wisdom is knowing
when to speak your mind and when to mind your speech. Words have the power to heal
broken hearts and make dreams come true. They have the power to make someone feel better
about themselves. They also have the power to break hearts in the first place and to keep
dreams from coming true. And of course they have the power to tear someone down
completely and cause them to feel completely worthless. Words have the power to both
destroy and heal. When words are both true and kind, they can change our world.

“Language (n): The music with which we charm the serpents guarding another's treasure.” Ambrose
Bierce.
Have you ever taken the time to think about just how powerful and effective words are? Words are
important elements of oral communication. They help us communicate to others our beliefs, opinions, sentiments
and experiences. Words used determine what we receive, how we think, and the accuracy with which we
communicate these thoughts and feelings. In oral communication, meanings are relayed or affected by the way
we say the words, by the tone of our voice, and by our body movements. Yet, the words themselves must mean
the same thing to the listener that they do to the speaker if we want to achieve effective and accurate
communication (Gutierrez). The words you speak can have a profound effect on the people they reach so
effective communication involves carefully chosen words. Are you encouraging or discouraging? Words are
continuously propelling us through life. They lift us up, drag us down, wound us deeply or heal our hearts.
Words have the power to break confidences, build life long alliances or start wars (Jane).
Words have set whole nations in motion…Give me the right word and the right accent and I will move the
world. Joseph Conrad
Words can inspire us to greatness; they enable us to share our deepest feelings with one another. Words can
change us as individuals. When used with care, they can change the world around us. Choose to use your words
to encourage and uplift. Choose them with wisdom and love (Jane).
“Few things in the world are more powerful than a positive push. A smile. A word of optimism and
hope.” Richard M. DeVos, billionaire businessman
Words are of different kinds, affecting and influencing our life beyond our expectations. Sometimes, we
fail to grasp their true power and how they affect our lives (Subhpoto 2009). Speaking comes to most people as
naturally as breathing. On many occasions our words are uttered without conscious thought; in fact we rarely
stop and think about what we are saying. Thousands of words pour out of our mouths each day as our thoughts,
opinions, judgements and beliefs are freely expressed. Often, however, we are oblivious to the positive or
negative effect these words have on ourselves and the people around us. At times we find it so difficult to refrain
from saying words we know will only harm. We have to think carefully before we let them go (White 2005).
“The real art of conversation is not only to say the right thing at the right time, but to leave unsaid the
wrong thing at the tempting moment. “ Dorothy Nevill
“By words we learn thoughts, and by thoughts we learn life.” Jean Baptiste Girard
Words can reveal thoughts, conceal pain, paint dreams, correct errors, and pass along dearly bought
lessons to the latest generation. Words can transport knowledge from the past, interpret the present, and speak to
the future. Words can build walls between people, or bridges. Words can tear down or build up, wound or heal,

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tarnish or cleanse. The ability to use words can endear you to your fellows, win them to your side, and enable
you to rise to heights you may now only dream of (Griessman 2007).
“Words are potent weapons for all causes, good or bad.” Manly Hall
Using proper words in communication is a skill. It is the skill of communicating. It is a skill to cloth
beautiful words in fitting words. It is the ability to use fitting words to captivate an audience. We should be
mindful of the word that comes through our tongue. Poorly chosen words can kill enthusiasm, impact selfesteem, lower expectations and hold people back. Well chosen ones can motivate, offer hope, create vision,
impact thinking and alter results. Select words that create a visual of the desired outcome; and choose each word
as if it mattered. If you want better results check your words because positive words produce positive results
(Russell 2004).
"Words are, of course, the most powerful drug used by mankind." Rudyard Kipling
The greatest power a man possesses is words. There is nothing that can compare to the power and the
impact of words. Putting in mind that the use of a single word can create a big impression or the other way
around. So know your words.
They stimulate, inspire and motivate us to use our energy to the fullest to gain maximum. Encouraging words
can do wonders for us. Our kind words can refresh and energize the people and give them fillip to do great and
constructive work, sometimes even beyond their power and capacity. Good words gladden hearts and harsh
words sadden and disappoint the listeners. Words of praise and admiration are indeed magical (Subhpoto 2009).
Most of us are unaware of the power of words and their effective use to make the most of them to be
successful in our life. We hardly give the words their due importance. We are supposed to have good
understanding of the words we use daily in both our written and spoken language. We must try to understand the
meaning of words and use them accordingly. When someone asked Confucius the meaning of the word “Virtue”,
the sage said: “Five things constitute virtue. They are courtesy, magnanimity, sincerity, earnestness, and
kindness. With courtesy you avoid insult. With magnanimity you win all. With sincerity men will come to trust
you. With earnestness and kindness you can achieve success.” (Subhpoto 2009).
Kind words can warm for three winters, while harsh words can chill even in the heat of summer.
Words have immense power to transform our life. What we need is to grasp their power to use them to our
own advantage and to improve our relations with the people we come into contact. By using good, soft and
pleasant words we can win the hearts of people and get their love, sincerity, devotion and dedication in return.
Sweet words can make our world a happy Eden where nothing but love and peace reign supreme (Subhpoto
2009).
Using words and terms that are understandable is wiser over impressive and not so often use ones that are
used sometimes to impress and not mean anything to the audiences. Know who your target audiences are
(Nodalo 2005).
Lee Iacocca said: "We can have brilliant ideas, but if you can't get them across, your ideas won't get
you anywhere".
Words have tremendous power. Words give out energy and a message which creates a reaction in others.
Everything you say produces an effect in the world. Whatever you say to someone else will produce some kind
of an effect in that person. We are constantly creating something, either positive or negative with our words.
Words of kindness and acceptance will generate a warm and appreciative reaction in a person. That person’s
response to the words will be stronger because it will have the emotion created by the words attached to it. The
power of words has a ripple effect in our life and those around us. We govern the world with words said one
successful leader (White 2005).
"You have it easily in your power to increase the sum total of this world's happiness now. How? By
giving a few words of sincere appreciation to someone who is lonely or discouraged. Perhaps you will

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forget tomorrow the kind words you say today, but the recipient may cherish them over a lifetime." Dale
Carnegie
An important key to success in life is to understand the power of words. A word is a thought eternalized.
Our thoughts do have a great effect on us even though they are internal. What we think effects the way we live
our life, it effects our emotions, our attitudes and our behaviour. A thought spoken, however, has even more
power. It can never be taken back; it is out of our mouth and will have an effect. Our words have even more
power than our thoughts because they not only affect ourselves, but the people and the world around us (White
2005).
"A careless word may kindle strife, A cruel word may wreck a life, A timely word may lessen stress,
A loving word may heal and bless."
Successful people take control of their words, rather than letting their words control them. They are more
conscious of their thoughts and words and the power they unleash. Successful people understand that they need
to speak positively rather than negatively in order to see success. Successful people are characterized by the
words that they speak. They know the importance of speaking words that will build self-esteem and confidence,
build relationships and build possibilities. They speak words of affirmation, encouragement, love, acceptance
and appreciation (White 2005).
“Thanks to words, we have been able to rise above the brutes, and thanks to words, we have sunk to
the level of the demons.” Aldous Huxley

To see more personal success, the words that we speak need to be in alignment with what we want to see
being produced in our life – our vision and our dreams. Your words can determine your destiny. Even more
importantly, your words can make a positive difference on the people you interact with every day. Before you
speak ask yourself: Is what I am about to say going to uplift the hearer? Will it inspire, motivate, and create
forward momentum for them? Will it dissolve fear and create safety and trust? Will I create a positive or
negative ripple effect by speaking out these words? Let‘s be determined to unleash the power of words for
positive change (White 2005).

Conclusion
Positive communication is a necessary life skill, an essential part of emotional intelligence, a way to get
ahead, and simply a way to be decent to others and words we use in communication can have a powerful hidden
influence on our motivation and faith in ourselves. Words can be used to build your own or another’s selfconfidence. Words have power. Think carefully before you let them go. Words have profound effect. Pearl
Strachan said “Handle them carefully, for words have more power than atom bombs.”

References
Clark, Anna. “The Power of Your Words.” January 2010 12 February 2010 &lt;http://www.sustainlane.com.html.
Griessman, Gene. “ The Power of Words.” May 2007 10 February 2010 &lt;http://www.impactarticles.com.html&gt;.
Gutierrez, T. Burgos. “Power-Packed Words and Praises” 13 February
&lt;http://www.jobsdb.com/PH/EN/.../Home/.../skills-impvmt.html&gt;.
Jane, Amy. “The Power of Words” 15 February 2010 http://www. hubpages.com/hub/Power-Of-YourWords.com.html.
Nodalo, Karen. “ The Power of Words.” July 2005 15 February &lt;http://www.articleblast.com.html&gt;.
Perera, Chandrasoma.” The Role of Words in Our Communicating Effectiveness.” September 2009 .

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17 February 2010 &lt;http:// www.articlesbase.com. html&gt;.
Russell S. Nan. “Words. Words. Words.” 2004 .
15 February &lt;http://www.careerknowhow.com/improvement/words.htm&gt;.
Subhpoto, Khadim Hussain. “The Magic Power of Words and Their Influence on People.” May 2009.
14th February &lt;http://www.articlealley.com.html&gt;.
White, Barbara. “Harness the Power of Words in Your Life” August 2005.
14 February 2010 &lt;http://ezinearticles.com. html&gt;

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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

Criticism on Edward Said’s Orientalism
Çağrı Tuğrul Mart
Ishik University
tugrulbey@hotmail.com
Alpaslan Toker
International Burch University
atoker@ibu.edu.ba
M. Fatih Esen
International Burch University
fesen@ibu.edu.ba

Abstract: Orient was a system of ideological fictions whose purpose was and is to
legitimize Western cultural and political superiority; furthermore, the Western
understanding of the East has grown out of a relationship of power, of dominance, of
varying degrees of complex hegemony. The Orient signifies a system of
representations framed by political forces that brought the Orient into Western
learning, Western consciousness, and Western empire. The Orient exists for the
West, and is constructed by and in relation to the West. It is a mirror image of what is
inferior and alien ("Other") to the West. Orientalism is "a manner of regularized (or
Orientalized) writing, vision, and study, dominated by imperatives, perspectives, and
ideological biases ostensibly suited to the Orient." It is the image of the 'Orient'
expressed as an entire system of thought and scholarship. The Oriental is the person
represented by such thinking. The Oriental is a single image, a sweeping
generalization, a stereotype that crosses countless cultural and national boundaries.
The term Orient particularly included regions that used to be known as Persia,
Mesopotamia, Asia Minor, and Egypt. As awareness of other Asian countries grew
in European consciousness, the term often came to mean South Asia, Southeast Asia
or East Asia. By the late 19th century, the term usually referred to China, Japan,
Korea and surrounding nations while the British colonists frequently used it when
speaking of India.
Key Words: Orient, Oriental, Other, Occident

Introduction
Orientalism is the imitation or depiction of aspects of Eastern cultures in the West by writers, designers and
artists. Orientalism was more widely used in art history referring mostly to the works of French artists in the 19th
century, whose subject matter, color and style used elements from their travel to the Mediterranean countries of
North Africa and Western Asia. Orientalism refers to the way in which non-Western specifically Asian cultures
are perceived in the West, by scholars, writers, thinkers, politicians and society at large. Orientalism first
appeared during the 19th century, when many scholars felt that a better knowledge of Asia was necessary to
further the West's colonial aspirations.
Edward Said argued in his highly influential book Orientalism (1978) that western scholars were so
contaminated by their European ideas and preconceptions that they could not deal honestly and fairly with Asian
topics. Said focused on the discipline of Oriental Studies in Europe, including philology, linguistics,
ethnography, and the interpretation of culture through the discovery and translation of Oriental texts. Said
stressed that they regarded their subjects as inferior to Westerners, and in general backward and in need of
European authority and guidance. He repeatedly complained the Orientalists saw the Orient as unchanging and
without an internal dynamic; it lacked internal potential for growth, unless it westernized. Edward Said

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developed the notion of Orientalism and argued that this form of thought tells more about the values and biases
of western society than about the far East. Said is best known for describing and critiquing "Orientalism", which
he perceived as a constellation of false assumptions underlying Western attitudes toward the East. In
Orientalism, Said claimed a "subtle and persistent Eurocentric prejudice against Arabo-Islamic peoples and their
culture. He argued that a long tradition of false and romanticized images of Asia and the Middle East in Western
culture had served as an implicit justification for Europe and the US' colonial and imperial ambitions. Just as
fiercely, he denounced the practice of Arab elites who internalized the US and British Orientalists' ideas of
Arabic culture. Said argued that the West had dominated the East for more than 2,000 years, since the
composition of The Persians by Aeschylus. Europe had dominated Asia politically so completely for so long that
even the most outwardly objective Western texts on the East were permeated with a bias that even most Western
scholars could not recognize. His contention was not only that the West has conquered the East politically but
also that Western scholars have appropriated the exploration and interpretation of the Orient’s languages, history
and culture for themselves. They have written Asia’s past and constructed its modern identities from a
perspective that takes Europe as the norm, from which the "exotic", "inscrutable" Orient deviates.
Edward Said argues that the Europeans divided the world into two parts; the east and the west or the
occident and the orient or the civilized and the uncivilized. This was totally an artificial boundary; and it was laid
on the basis of the concept of them and us or theirs and ours. The Europeans used Orientalism to define
themselves. Some particular attributes were associated with the Orientals, and whatever the Orientals weren’t the
Occidents were. The Europeans defined themselves as the superior race compared to the Orientals; and they
justified their colonization by this concept. They said that it was their duty towards the world to civilize the
uncivilized world. The main problem, however, arose when the Europeans started generalizing the attributes they
associated with Orientals, and started portraying these artificial characteristics associated with Orientals in their
western world through their scientific reports, literary work, and other media sources. What happened was that it
created a certain image about the Orientals in the European mind and in doing that infused a bias in the European
attitude towards the Orientals. This prejudice was also found in the Orientalists (scientist studying the Orientals);
and all their scientific research and reports were under the influence of this (Orientalism 1978).
Said puts forward several definitions of 'Orientalism' in the introduction to Orientalism (the quotations
coming directly from Said) :
•
•
•
•
•
•
•

"A way of coming to terms with the Orient that is based on the Orient's special place in European
Western experience." (p.1)
"a style of thought based upon an ontological and epistemological distinction made between 'the Orient'
and (most of the time) 'the Occident'." (p.2)
"A Western style for dominating, restructuring, and having authority over the Orient."
"...particularly valuable as a sign of European-Atlantic power over the Orient than it is as a veridic
discourse about the Orient." (p.3)
"A distribution of geopolitical awareness into aesthetic, scholarly, economic, sociological, historical,
and philological texts." (p.12)
“The classical tradition of studying a region by means of its languages and writings: thus anyone who
teaches, researches or writes about the Orient is an orientalist.”
“A library or archive of information commonly and, in some of its aspects, unanimously held … a
family of ideas and a unifying set of values … These ideas explained the behavior of Orientals; they
supplied the Orientals with a mentality, a genealogy, an atmosphere; most important, they allowed
Europeans to deal with and even to see Orientals as a phenomenon possessing regular characteristics.”

Said summarized his work in these terms:
My contention is that Orientalism is fundamentally a political doctrine willed over the
Orient because the Orient was weaker than the West, which elided the Orient’s difference
with its weakness. As a cultural apparatus Orientalism is all aggression, activity,
judgment, will-to-truth, and knowledge.
(Orientalism 1978)

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Criticism on Edward Said’s Orientalism
Orientalism is a study of the genesis, evolution, and reproduction of a specific Western tradition of knowledge
concerned with the Mashreq, or the eastern part of the Arabo-Islamic world. This tradition, however, is not one of
pure and objective knowledge; rather it is the elaboration of a set of fantasies and beliefs that is subsequently used as
the basis for Western colonial enterprise. Thus, Said's book is about aggression both symbolic and real; it is about the
politics of knowledge, or rather about knowledge as a form of politics (Rassam 1980: 505).
Said's radical thesis is set: the easy and logical convergence between Orientalism and Imperialism; the
Orientalists as a conscious or unconscious collaborator in the colonial takeover of the Orient (Rassam 1980:
506).
Said in Orientalism never really tackles the problem of the proper approach to "other" cultures and a sense
of ambiguity and unresolved dilemma persists with the reader. Said sidesteps the issue by saying that his purpose
is not to displace the old system of representations with a new one but simply to describe the context for the rise
and development of Orientalism and its consequences. At one point, however, Said writes that "human societies,
or at least the most advanced cultures, have rarely offered the individual anything but imperialism, racism, and
ethnocentrism in dealing with 'other' cultures." Now, if all "advanced cultures" (including the developing
Oriental ones) share this basic tendency, why single out Europe's failure to rise above it unless one assumes that
because of its intellectual superiority and cultural achievement the West should have been able to overcome this
natural human tendency. Said never says so outright, but one gets the feeling that he is judging Europe not in
terms of its own historical reality and intellectual development, but in terms of the claims it makes for itself as
the arbitor and guardian of humanity's highest values. And that is perhaps fair enough, since within the Western
intellectual tradition, modern Orientalism in a sense represents a dinosaur, an outdated, fossilized theoretical
edifice using language and concepts better suited to the nineteenth century (Rassam 1980: 508).
If you study a culture or group of cultures having the character of the "Oriental," your study, as Edward
Said's book points out, is itself open to analysis as a manifestation of "Western" culture. A book which indicates,
as his does, that "Western" representations of the East (beginning with the notion of the East itself) have
purposes which relate to purely Western needs and projects can be seen in its turn as a representation of
Orientalism having purposes of its own, such as the furtherance of Arab political causes. A review which points
these things out is itself asking to be reviewed in terms of its own representations and purposes (Chambers 1980:
509).
Said's work can be seen as coming at the end of and to a considerable degree negating an earlier body of
debate and work, much of it stimulated by the war in Vietnam and the broader upheavals of the Third World at
the time. Said's work both subsumed that earlier debate and started a new one because while much of the other
work was framed in broadly Marxist terms and was a universalist critique, Said, eschewing materialist analysis,
sought to apply literary critical methodology and to offer an analysis specific to something called 'the Orient'; the
result is that the issue of Orientalism, as debated in the Anglo-Saxon world over the past decade and a half, has
had relatively clear battle lines, familiar to you all. On the one hand, the book of Edward Said advanced a
comprehensive critique of Western, particularly English, French and American, writing on the Middle East,
ranging from the eighteenth century to the present day, and encompassing literature, history, political and other
sciences. Under the influence of Said's critique a range of work has been produced, criticizing academic and
other writing on the region as, in various terms, Eurocentric, imperialist, racist, essentialist, and so forth. On the
other hand, a range of writers on the region, most notably Bernard Lewis, have rebutted Said's charge and argued
for an approach which falls, to a greater or lesser extent, into the 'Orientalist' category (Halliday 1983: 148).
Said would seem to engage in an injudicious elision namely, that treatment of texts produced within the
social sciences and in related activities such as journalism or travel writing, and literature. Of course, there are
similarities and mutual influences; but while one is a necessarily fictional activity, without controls in reality or
direct links to the acts of administration, domination, exploitation, the former is so controlled. To assume that
the same critique of discourses within literature can be made of those within social science is questionable; it
may indeed reflect the hubris, rather too diffuse at the moment, of theorists deriving their validation from
cultural studies. This brings an area of difficulty with the critique of Orientalism, namely its analysis, or rather
absence thereof, of the ideas and ideologies of the Middle East itself. Said himself has, in his other writings,
been a trenchant critic of the myths of the Middle East and of its politicians, and nowhere more so than in his
critique of the poverty of the intellectual life of the Arab world: while the rulers have constructed numerous
international airports, he once pointed out, they have failed to construct one good library. But the absence of
such a critique in his Orientalism does allow for a more incautious silence, since it prevents us from addressing
how the issues discussed by the Orientalists and the relations between East and West are presented in the region
itself (Halliday 1983: 160).

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Said’s thesis, shaped by both Gramscian Marxism and post-modernist French “high theory”
(particularly that of Foucault), has provided the magnetic pole around which much of the recent debate about
Orientalism has gravitated. Said’s argument was not altogether new but the originality and force of Orientalism
derived, at least in part, from his insistent application of the Foucauldian principle that knowledge can never be
“innocent” and is always deeply implicated in the operations of power. Through a wide-ranging analysis of
literary texts, travel writing and a mass of European documents, Said uncovered a system of cultural description
which was “deeply inscribed with the politics, the considerations, the positions, and the strategies of power.”
(Oldmeadow 2004: 9).
Ziauddin Sardar in his recent work “Orientalism” argues that the problem of Orientalism, what makes
the dissection and display of its skeletal being a tricky matter, is the very fact of its existence. Because
Orientalism exists we have a world where reality is differently perceived, expressed and experienced across a
great divide of mutual misunderstanding. To discuss Orientalism one has to urge people to go beyond this
misunderstanding and see what has been made invisible: to distinguish a different outline in a picture that has
been distorted by centuries of myopic vision. There is nothing about Orientalism that is neutral or objective. By
definition it is a partial and partisan subject. No one comes to the subject without a background and baggage.
The baggage for many consists of the assumption that, given its long history, somewhere within or about this
subject there is real knowledge about the Orient; and that this knowledge can be used to develop an
understanding of the cultures East of the West. The task of this book is to undermine this assumption. While
Orientalism is real, it is still, nevertheless, an artificial construction. It is entirely distinct and unattached to the
East as understood within and by the East. There is no route map, no itinerary locked within the subject to bridge
that divide (Sardar Orientalism: 75)
Orientalism is a book with a thesis –that “Orientalism derives from a particular closeness experienced
between Britain and France and the Orient which until the early nineteenth century had really meant only in
India and the Bible lands”. To prove this point Said makes a number of very arbitrary decisions. His Orient is
reduced to the Middle East, and his Middle East to a part of the Arab world. By eliminating Turkish and Persian
studies on the one hand and Semitic studies on the other, he isolates Arabic studies from both their historical and
philological contexts. The period and area of Orientalism are similarly restricted (Lewis 1982: 50)
Said's account contains many factual, methodological and conceptual errors. Said ignores many genuine
contributions to the study of Eastern cultures made by Westerners during the Enlightenment and Victorian eras.
Said's theory does not explain why the French and English pursued the study of Islam in the 16th and 17th
centuries, long before they had any control or hope of control in the Middle East. Critics have noted Said ignored
the contributions of Italian, Dutch, and particularly the massive contribution of German scholars. Lewis claims
that the scholarship of these nations was more important to European Orientalism than the French or British, but
the countries in question either had no colonial projects in the Mideast (Dutch and Germans), or no connection
between their Orientalist research and their colonialism (Italians). Said's theory also does not explain why much
of Orientalist study did nothing to advance the cause of imperialism (Lewis 1982: 52)
The critique of Orintalism raises several genuine questions. A point made by several critics is that the
guiding principle of these studies is expressed in the dictum “knowledge is power” and that Orientalists were
seeking knowledge of Oriental peoples in order to dominate them, most of them being directly or objectively in
the service of imperialism. Another charge leveled against the Orientalists is that of bias against the peoples they
study, even of a built-in hostility to them. The most important question least mentioned by the current wave of
critics – is that of the scholarly merits, indeed the scholarly validity, of Orientalist findings. And Said has hardly
touched on this question and has indeed given very little attention to the scholarly writings of the scholars whose
putative attitudes, motives, and purposes form the theme of his book (Lewis 1982: 54)
In his book Dangerous Knowledge, British historian Robert Irwin criticizes what he claims to be Said's
thesis that throughout Europe’s history, “every European, in what he could say about the Orient, was a racist, an
imperialist, and almost totally ethnocentric.” Irwin points out that long before notions like third-worldism and
post-colonialism entered academia, many Orientalists were committed advocates for Arab and Islamic political
causes.
Irwin's argument is that the field of European research into Middle Eastern language, culture, and history
was by no means so tightly linked to Western imperial ambitions as Orientalism suggests. He is also very
skeptical of the value of analyzing Orientalist scholarship alongside Western literary texts devoted to the East—
evading the distinctions between kinds of texts by treating them all as manifestations of a colonialist discourse.
While acknowledging the great influence of Orientalism on postcolonial theory since its publication in
1978, George P. Landow - a professor of English and Art History at Brown University in the United States -

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finds Said's scholarship lacking. He chides Said for ignoring the non-Arab Asian countries, non-Western
imperialism, the Occidentalist ideas that abound in East towards the Western, and gender issues. Orientalism
assumes that Western imperialism, Western psychological projection, "and its harmful political consequences are
something that only the West does to the East rather than something all societies do to one another." Landow
also finds Orientalism's political focus harmful to students of literature since it has led to the political study of
literature at the expense of philological, literary, and rhetorical issues Landow points out that Said completely
ignores China, Japan, and South East Asia, in talking of "the East," but then goes on to criticise the West’s
homogenisation of the East. Furthermore, Landow states that Said failed to capture the essence of the Middle
East, not least by overlooking important works by Egyptian and Arabic scholars. In addition to poor knowledge
about the history of European and non-European imperialism, another of Landow’s criticisms is that Said sees
only the influence of the West on the East in colonialism. Landow argues that these influences were not simply
one-way, but cross-cultural, and that Said fails to take into account other societies or factors within the East. He
also criticises Said’s "dramatic assertion that no European or American scholar could `know` the Orient."
However, in his view what they have actually done constitutes acts of oppression. Moreover, one of the principal
claims made by Landow is that Said did not allow the views of other scholars to feature in his analysis; therefore,
he committed “the greatest single scholarly sin” in Orientalism.
In Defending the West, Ibn Warraq demonstrates that Said is guilty of the major intellectual errors he
ostentatiously decries in the twenty-fifth anniversary edition preface: obscuring the diversity and complexity of
lived experience by falsely ascribing essential features to peoples and civilizations; and rendering categorical
moral and political judgments without the adequate historical knowledge on which responsible judgment
depends. He shows that Said routinely produces pretentious, meaningless, and contradictory speech. Most
notably, in the fashion of the more glib postmodernism, Said stresses that "the Orient" does not exist but is rather
the paranoid construction of Western scholars. This, however, does not prevent him from blatantly contradicting
himself by positing that two centuries of study by scholars in Europe and the U.S. have produced "a growing
systematic knowledge in Europe about the Orient" and "a fair amount of exact positive knowledge about the
Orient." Nor does it stop Said from decrying Orientalists because contrary to his insistence that a real Orient
does not exist and contrary to his acknowledgment that the Orientalists have gained substantial knowledge of it
— they have "‘no interest in, much less capacity for, showing what the true Orient and Islam really are.'
Said’s case against the West is seriously flawed. Warraq accuses Said of not only willfully misinterpreting
the work of many scholars, but also of systematically misrepresenting Western civilization as a whole.
Charles Paul Freund in his article “The end of the Orientalist critique” argues that Said in his book
Orientalism was a harsh interpretation of the West's attitude toward just these matters, and the critique he
established has since dominated the intellectual appraisal of the West's political and cultural relationship to the
Muslim world and other peoples of the East. What was Orientalism? Said identified it in his foundational work
as the political, cultural, and intellectual system by which the West has for centuries "managed" its relationship
with the Islamic world. The central stratagem of this process has been reductionist misrepresentation. In brief,
according to Said and the army of intellectual critics and journalists who have come in his wake, Orientalism
transforms the East and its people into an alien "Other." That Other—usually a Dark Other—was in every way
the inferior of the West: unenlightened, barbarous, cruel, craven, enslaved to its senses, given to despotism, and,
in general, contemptible. Having established an Eastern Other in these degrading terms, the West emerged at the
center of its self-serving discourse as, by obvious contrast, enlightened and progressive.

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Conclusion
Edward Said in his study “Orientalism Reconsidered” as an answer to these criticism writes “my argument
was that neither existed except as 'communities of interpretation', and that, like the Orient itself, each
designation represented interests, claims, projects, ambitions and rhetorics that were not only in violent
disagreement, but were in a situation open warfare. So saturated wi t h meanings, so overdetermined by history,
religion and politics are labels like 'Arab' or 'Muslim' as subdivisions of 'The Orient' that no one today can use
them without some a t t e n t i o n to the formidable polemical mediations that screen the objects, if they exist at
all, that the labels designate.”.
Said in “Orientalism Reconsidered” argues that the challenge to Orientalism, and the colonial era of which
it is so organically a pail, was a challenge to the muteness imposed upon the Orient as object. Insofar as it was a
science of incorporation and inclusion by virtue of which the Orient was constituted and then introduced into
Europe, Orientalism was a scientific movement whose analogue in the world of politics was the Orient's colonial
accumulation and acquisition by Europe. The Orient was, therefore, not Europe's interlocutor, but its
silent Other. From roughly the end of the eighteenth century, when the Orient was re-discovered by Europe, its
history had been a paradigm of antiquity and originality, functions that drew Europe's interests in acts of
recognition or acknowledgement but from which Europe moved as its own industrial, economic and cultural
development seemed to leave the Orient far behind. Oriental history for Hegel, for Marx, later for Burkhardt,
Nietzsche, Spengler and other major philosophers of history was useful in portraying a region of great age, and
what had to be left behind. Literary historians have further noted in all sorts of aesthetic writing and figurative
portrayals that a trajectory of 'Westering', found for example in Keats and Holderlin, customarily saw the Orient
as ceding its historical preeminence and importance to the world spirit moving westwards away from Asia and
towards Europe.
Said in the study writes
The divergences between the numerous critiques of Orientalism us ideology and praxis arc
very wide nonetheless. Some attack Orientalism as a prelude to assertions about the
virtues of one or another native culture: these are the nalivists. Others criticize Orientalism
as a defence against attacks on one or another political creed: these are the nationalists.
Still others criticize Orientalism for falsifying the nature of Islam: These are, grosso modo,
t h e believers. I will not adjudicate between these claims, except to say that I have avoided
taking stands on such matters as the real, true or authentic Islamic or Arab world. But, in
common with all the recent critics of Orientalism, I think that two things are especially
important one, a methodological vigilance that construes Orientalism less as a positive
than as a critical discipline and therefore makes it subject to intense scrutiny, and two, a
determination not to allow the segregation and confinement of the Orient to go on without
challenge. My understanding of this second point has led me entirely to refuse
designations like 'Orient' and 'Occident'.
(Orientalism Reconsidered 1985)

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References
Castle, Gregory. The Blackwell Guide to Literary Theory Malden: Blackwell Publishing, 2007
Freund, C. Paul. “The end of the
&lt;http://www.reason.com/archives.html&gt;.

Orientalist

Critique”

December

2001

25

Jan.

2010

Habib, M.A.R. A History of Literary Criticism From Plato to the Present Malden: Blackwell Publishing. 2005.
Halliday, Fred. “Orientalism and Its Critics” British Journal of Middle Eastern Studies 20.2 (1983), 145-163
Lewis, Bernard. “The Questions of Orientalism” The New York Review (1982), 49-56.
Ning, Wang. “Orientalism Versus Occidentalism” New Literary History 28.1 (1997), 57-67
Oldmeadow, Harry. “The debate About Orientalism” World Wisdom (2004), 3-19
Parry, Benita. “Problems in Current Theories of Colonial Discourse” Oxford Literary Review 1.2 (1987)
Rassam, Amal, and Ross Chambers. “Comments on Orientalism” Comparative Studies in Society and History
22.4 (1980), 505-512
Robert, Irwin. Dangerous Knowledge London: Penguin Group Publishing, 2006
Said Edward W. Orintalism. 1978. London: Penguin, 1985
Said, Edward. “Orientalism Reconsidered” Race Class (1985)
Sardar, Ziauddin. Orientalism Buckingham: Open University Press, 1999
Spivak, Gayatri Chakravorty. “Can the Subaltern Speak?” Marxism and the Interpretation of Culture. Ed. Cary
Nelson and Lawrance Grossberg. Urbana: University of Illinois Press, 1988.
Warraq, ibn. Defending the West: A Critique of Edward Said’s Orientalism New York: Prometheus Books, 2007

373

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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

The Story Behind the Progress
Alisa Mesihović
International Burch University
apindzo@ibu.edu.ba
Abstract: The aim of this paper is to discuss how are women affected by the collapse
of the state socialist regimes in Central and Eastern Europe but the main focus will be
ex-Yugoslavia countries. Social status and employment of women will be discussed,
especially tertiary-educated women. I am particularly interested in quality of life that
has changed and I will argue that these changes affect men and women in different
ways i.e. that women lost much more of their quality of life due to great social
changes. I am going to use different sources, primary researches, but I have also
conducted small case study of women scientists working at the university.
In conclusion I will show that “opening” and “liberalization” of new labour markets
contributed to loss of the quality of life but especially forced women to change their
ways of life. This is very interesting in light of the fact that in countries discussed
woman is still expected to fulfil her domestic roles first and then to have successful
carrier as well.

Key words: university, education, market, gender equality, life quality

Introduction
Sustainable development rests on maintaining long-term economic, social and environmental capital.
While the importance of investing in economic assets to assure progress has long been recognised, sustainable
development also bring attention to the ecological and human dimensions which are also key to growth and
development. In failing to make the best use of their female populations, many countries are under investing in
the human capital needed to insure sustainability.
The aim of this essay is to discuss how women are affected by the collapse of the state socialist regimes
in Central and Eastern Europe but the main focus will be ex-Yugoslavia countries. Social status and employment
of women will be discussed, especially tertiary-educated women.
I am particularly interested in quality of life that has changed and I will argue that these changes affect men and
women in different ways i.e. that women lost much more of their quality of life due to great social changes.
Indicators of life quality are not only material, i.e. economic but for the purpose of this assignment I
will limit them to education, health-care and welfare.
Case study conducted here is about three women, different age groups who basically do the same job, in the
same country, even at the same institution – University of Sarajevo, but under very different conditions.
Theoretical approach used in this study is frog’s perspective i.e. the process of transition will be
discussed through the lives of these three individuals.
Methodology used is qualitative analysis, one focus group aimed to provide better insight in specificity
of gender roles in two different social systems. To explain, feminist epistemology is different from the classical
one and so are the feminist methods of research. One of the main characteristic of feminist methodology is
domination of personal experiences and oral histories that are recorded, so the interview was the most convenient
method to get primary information.††††††††††††††††††

The Story Behind Numbers, Post-Transition and Gender Equality: “Blessings of
Transition”
After the war in ex-Yugoslavia countries and transition in other ex-socialistic countries question of
gender equality became well known to general public, but most of the people still believe that it is the product
from western democracies.

††††††††††††††††††

Note: Names in the interviews are changed in order to protect the privacy of participants.

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�2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo
I am not going to claim that socialistic society was not patriarchal but my claim is that if it had not been
less patriarchal than Western European and American societies it was not more so.
The phenomenon of a relatively high female presence among professionals and highly-educated is a legacy of
women’s long history of attaining advanced degrees under state socialism.‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡
Socialistic system provided strong educational support for everyone regardless of gender, age, social
status… etc. I am not trying to prove that there were no discriminatory experiences in that system but that would
be the subject of another research and assignments. I was informed that in ex-Yugoslavia, for example,
scholarships were available for everyone and that the education was in most cases absolutely free.
When gender is considered there have always been professions which are considered to be exclusively
male or female occupations but lack of legal frame for such claims opened the door to change these stereotypes.
During the process of transition and after the collapse of socialistic system, countries faced “the
blessings of transition”. One of the most prominent is definitely opening of markets which I could experience as
a child in 1989. and at the beginning of 1990ies. My generation can still remember famous “Ante Marković’s
Reforms” in ex-Yugoslavia and bananas and Austrian chocolates that became so cheap in that period of time. So
my first image of transition is definitely the bright one. Others seem a bit foggy since the war came and the only
economy I can speak about is the economy of survival.
Interesting experience of both Croatia and BiH is that in spite of escalation of war and abnormal life
condition education in all levels was rarely stopped. Schools and faculties continued to function regardless of
unimaginably miserable conditions. It is important to say that most men took the weapon and that education
depended on women.
Collapse of once collective state and construction of new ones reinforced sense of ethnicity and ethno
politics did renew the role of patriarchy, greatly helped by religious feeling regained. This added an extra burden
for women to re-prove how good mothers and wives they are. In this contest linguistic analyses of word
meanings is very interesting where we can prove that the term “nation” (narod) the most popular one during the
age of transition is deeply enrooted in terms “birth, gender”…(rod, roditi…). So hand in hand of opening of new
labour and all other markets came reinforcement of patriarchy and importance of women’s domestic roles. By
conducting a small case study I tried to find out what has transition brought to tertiary educated women.

Women in the Sciences, B&amp;H Universities
Focus of this research is age of the women that took part in this study, since their profession is the same
one. Two of them finished the Faculty of Philosophy, University of Sarajevo and the third one finished Faculty
of Arts at University of Sarajevo as well.
Ms. Amy (as aforementioned names are changed) was born in 1940. and she got her B.A. degree at
Sarajevo University in 1965. Being the best student in generation she was awarded a scholarship to continue her
education in England and position of Teacher Assistant at the University was guaranteed to her.
When she came back from UK in 1967. she was working at the University and in the meantime she got
married and had her first child. Ms. Amy remember that period as one of the most beautiful in her life since she
was already starting her PhD and than she had enough time to think about her baby and her future education. She
was provided maternity lave for one year without any reduction of her salary. Anyway she came back to work
after six months since she had great help of both her mother and mother in law and also of the whole her end her
husband’s family who were very proud of her academic achievements.
Her second child Ms. Amy had as already well known young university professor and once again she
enjoyed her maternity leave. She explained to me that at the time when her children were babies and while
growing up there was no need to worry for health care since it was free of charge for everyone and for every cure
that people needed.
Her salary was a bit higher than average one in ex-Yugoslavia so she was happy to be able to travel
abroad both for business and private purposes.
Ms. Amy still works in couple of universities in BiH and is highly admired by all her students for being great
professor and a great person.
Ms. Layla is 29 years old. She got her B.A. at University of Sarajevo in 2002. and continued her
education at the same institution. Ms. Layla had to pay full tuition fees for her education since no scholarships
were available. She’s been also working as a teacher’s assistant for three years now, for one of the public
universities but her engagement is still on free lance basis. That mean she has no pension or health insurance
‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡

UNIFEM, The Story Behind the numbers: Women and Employment in Central and eastern Europe and the
Western Commonwealth of Independent States, 2006. p. 47; in „Gender and Development“, Reader, Ceter for
Interdisciplinary Post-graduate Studies Sarajevo, 2008/2009, edited by Marina Blagojevic, PhD

476

�2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo
paid and now being pregnant, Ms. Layla has to pay for every single health care service. She will have no kind of
maternity leave since she cannot afford the luxury of not working. That would mean she wouldn’t be able to pay
for her child health care.
Ms. Layla also works at two more different places where she teaches to get some extra money. At the
same time although she has a great support of her mother she cannot rely on her service to look after new born
baby since her mother is still working. Their plan is that grandmother to be, will take one month vacation when
baby is one month old so Ms. Layla can go back to work.
Although Ms. Layla is teaching foreign languages and is quite an expert, she has never visited a foreign country.
The third story is about Ms. Nina, 31 years old lecturer who is regularly employed at full time basis at
university of Sarajevo. She has been working for 7 years when she had her first child. Although she was
guaranteed one year of fully paid maternity leave, no one could guarantee her that promotion of lecturer into a
senior lecturer will not happen to the colleague who replaced her while she was absent. For this reason Ms. Nina
decided to go back to work when her baby was only 3 months old and since there is no any official child-care
institutions available for that age of children, Ms. Nina had to hire a lady to look after her child. Absurd is that
she had enormous choice between lots of very well educated women who were ready to work for one quarter of
her salary.
Now I come back to the question what has “patriarchy regained” brought to women in ex-socialist
countries? Is the role of mother and wife appreciated more and can we find women who enjoy respect for just
being mothers and giving up all other occupations? It is hard to believe so. We see much more women who are
expected to fulfil their domestic roles and have successful career at the same time.
The European Commission’s report “Waste of Talents: Turning Private Struggles into a Public issue”,
represented that women were better represented in the scientific work force in new EU member states and
candidate countries from CEE than in the EU -15 accounting for 38 percent of total scientific researchers. The
proportion ranges from 52 per cent in Latvia to 27 percent in The Czech Republic, while the average for EU-15
is 27 per cent.§§§§§§§§§§§§§§§§§§
This gap is definitely not due to the fact that women in EU-15 have more children or that domestic roles
are more important and appreciated in this society. Moreover rate of birth is still significantly higher in CEE
countries than in EU-15 countries.
Authors of afore mentioned research, question if the high levels of participation are good news for
women scientists in region. But when this research “peeled out layers” it was found that this statistics covered
bitter truths, one of those already described in case-study of this assignment. Furthermore, large number of
women scientists and scholars is employed in areas where work conditions are suboptimal.
Very interesting is detail from UNIFEM’S research that shows how majority of teaching stuff at
universities, (54%) is female but men are three times more likely than women to reach senior academic
positions. The prospects of young female scientists and scholars are bleak due to lack of funding, rigid patterns
of promotion and lack of appropriate welfare policies.******************* The unfavourable position of science and
education which can be observed in former socialist societies and former industrialized societies going through
or having gone through the process of “transition” (i.e. East-Central European societies within the EU or outside)
is closely connected to the feminisation of science.
According to the Enwise Report, scientific work is characterised by low salaries, low prestige and bad
working conditions. Research clearly shows that both location and gender are crosscutting differences as regards
the material, epistemic, technical and administrative as well as emotional support which scientists receive.
Women (and other non-dominant groups) are more vulnerable if meritocracy is not exercised through transparent
and objective sets of rules and procedures.†††††††††††††††††††
Realizing that women are so often in charge of at least two employments ( in public and private sphere) would
be a good start for necessary changes in procedures in force.

§§§§§§§§§§§§§§§§§§

UNIFEM, The Story Behind the numbers: Women and Employment in Central and eastern Europe and the
Western Commonwealth of Independent States, 2006.p. 47; in „Gender and Development“, Reader, Ceter for
Interdisciplinary Post-graduate Studies Sarajevo, 2008/2009, edited by Marina Blagojevic, PhD
*******************
Ibid. p. 47
†††††††††††††††††††
http://www.wbc-inco.net/object/news/2653.html
Archive : Gender and Excellence in S&amp;T - An issue in the Western Balkans?
By Marina BLAGOJEVIC on Dec 16, 2007

477

�2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

Part-time and free lance employment:
Coming back to the case study once more, I have to mention part-time employment and free-lance
based employment which is very often seen as a good solution to problem of work-family balance. But as the
example showed apart from saving a couple of working hours, part time engagement can only provide social
insecurity for women. So as flexibilization of employment relations and lowering of social protection have been
widespread in Central and Eastern Europe since transition, reduction in unemployment was expected.
It is not necessary to mention again that the goals are not achieved and that as the transition started, the
number of employed people has never reached the level of employed workers in industrialized communist
society.
Gender gap is envisaged once again if we just consider how much easier is for men to take more
flexible jobs at the same time since the reinforcement of patriarchy once again confirmed the attitude that it is
not their obligation to participate in “care-work”. This shows that woman does not necessarily have to be
married or to have children to be “eligible” for extra work of providing care. Women have always been first in
chain to provide care for older members of family, sick ones, etc.
It is obvious than why employers are very often so keen to give advantage to men, when choosing employees.

Conclusion:
Trying to reflect my personal impressions through the lance of feminist perspective I gave my best to show that
“opening” and “liberalization” of new labour markets contributed to loss of the quality of life but especially
forced women to change their ways of life. Private life became almost impossible, or at least undesirable in the
process of establishing successful carrier. My greatest wish is that this claim becomes false and outdated as soon
as possible and one of lights at the end of tunnel might be plan of European Commission to improve
communication between society and science. Still as long as we expect someone else to solve our problems and
are waiting to see »the sun coming from the west« there cannot be much improvement. Successful model of
career-private life symbiosis has already been seen in EEC and it is up to educated people to renew and improve
that model now.
If we just pay enough attention to the facts how this change affects not only women, but also those who
»rely on« their help in some phase of their life (children and other members of family) we shall se that it is not
only feminists' policy and duty to improve these condition. In this case it is so obvious that term feminist implays
terms »childrenist«, »humanist«... I gues that than patriachists would not have such a big problem to understand
that improwing the quality of life for women means the quality of life for everyone and science is to play the key
role in creating new pespectives. Very interesting for me was the statement that classical academic knowledge is
too slow, and that centers established apart from universities should enable articulation of new knowledge
created by interaction of excellent scientists. ‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡

‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡

. http://www.womenngo.org.rs/sajt/sajt/saopstenja/razgovori/marina_blagojevic.htm
Accesed july, 2009. Iz knjige: Nadežda Radović, Politika na ženski način – RAZGOVORI MARINA BLAGOJEVIĆ

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References:
Blagojević Marina, (2009), Knowledge Production and the Semiperiphery: A Gender Perspective, Belgrade,
Institute for Criminological and Sociological Researches.
UNIFEM, (2006), The Story Behind the Numbers: Women and Employment in Central and Eastern Europe and
the
Western
Commonwealth
of
Independent
States,.
Daša Šašić-Šilović, (2009), Eastern Europe-capacity challenge.
http://www.womenngo.org.rs/sajt/sajt/saopstenja/razgovori/marina_blagojevic.htm
Accesed july,
2009. Iz knjige: Nadežda Radović, Politika na ženski način – RAZGOVORI MARINA BLAGOJEVIĆ
Tragičan spoj patrijarhalne i postindustrijske mizoginije
http://ec.europa.eu/research/science-society/pdf/sc_soc_wasted_talents_en.pdf
Accesed july, 2009.
http://www.wbc-inco.net/object/news/2653.html
Archive : Gender and Excellence in S&amp;T - An issue in the Western Balkans?
By Marina BLAGOJEVIC on Dec 16, 2007
Accesed july, 2009

479

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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

Two Women, Two Wars, Two Plays:Queen Elizabeth I and Lady Thatcher
in the Theatre
Nilgün Müftüoğlu
Department of Translation &amp; Interpretation
School of Foreign Languages
Karadeniz Technical University
Turkey
denizmuftuoglu6107@hotmail.com

Abstract: Theatre does not only provide people with mere entertainment but also
throughout history it has functioned as an effective instrument through which those in
power impose their policies or playwrights vigorously criticize these policies. In this sense,
Elizabethan drama, which is often associated with Shakespeare, played a significant role of
endorsing the ideas and policies of a woman ruler, Queen Elizabeth I, namely maintenance
of order and equilibrium in that particular period, whereas Lady Thatcher’s policies, one of
the longest serving politician in British Political History, came under severe criticism from
the prominent contemporary playwrights in the 1980s. In this paper, Elizabeth I and
Margaret Thatcher are compared in terms of their portrait in the theatre by referring to two
plays, Henry V and Sink the Belgrano!. Although Henry V is not a play directly about
Elizabeth I, it celebrates Elizabeth I and her victory at the defeat of Spanish Armada. And
Sink the Belgrano! directly criticizes Thatcher’s policy in Falklands War.

Throughout history theatre has not only provided people with mere entertainment but also functioned as
an effective instrument through which those in power have imposed their policies while simultaneously allowing
playwrights to vigorously criticize these policies. This can be seen particularly clearly in the comparison
between Elizabethan Drama and the theatre under Thatcher’s rule. Elizabethan drama which is often associated
with Shakespeare played a significant role in endorsing the ideas and policies of a woman ruler, Queen Elizabeth
I, namely maintenance of order and equilibrium in that particular period. On the other hand, Lady Thatcher’s
policies, one of the longest serving politicians in British Political History, came under severe criticism from the
prominent contemporary playwrights in the 1980s. Such an argument might be strengthened by attention to their
portraits in the theatre by referring to two plays, Shakespeare’s Henry V and Steven Berkoff’s Sink the
Belgrano!. Although Henry V is not a play directly about Queen Elizabeth I, it alludes to Elizabeth and her
victory at the defeat of the Spanish Armada. On the other hand, Sink the Belgrano! directly criticizes Thatcher’s
policy in the Falklands War.
These two ruling women, Queen Elizabeth I from the sixteenth century and Margaret Thatcher from the
twentieth century, share many similarities in terms of their character and political events of their era. Both
women exhibit characteristics that prevent themselves from behaviors peculiar to the weaker sex. Elizabeth I was
so concerned with the welfare of her country that she turned down all marriage proposals for the sake of her
country as she thought that marriage would only serve to distract her from her governmental duties. Elizabeth’s
commitment to her country is strikingly clear in this expert from her coronation speech. As she displayed her
coronation ring, just like a wedding ring she stated as such “Behold…the Pledge of this my Wedlock and
Marriage with my Kingdom. Every one of you, and as many as are English-men, are Children and Kinsmen to
me” (Thomas, 1998, p. 95). Like a wife and a mother with responsibilities for her husband and children,
Elizabeth had the responsibility to maintain the order and safety in the country as well as to remain faithful.
Then, how could people expect her to marry while she had already been married?
As for Margaret Thatcher, she had a hair-style in the appearance of being contrived and always dressed
in either black or blue with an intention to have more impact than her male colleagues (Peacock, 1999).
Elizabeth I had only one wish which was to get England to be recognized as a world power. By the same token,
Margaret Thatcher desired to prove that England was still the world power as it used to be. Neither Elizabeth I
nor Lady Thatcher inherited a peaceful and stable country. When Elizabeth I ascended to the throne in 1558,
country was suffering from serious economic problems including inflation, the debasement of coinage and their
farmers were struggling with another bad harvest (Hibbert, 1992). Likewise, in 1979 when Margaret Thatcher
was elected as the Prime Minister, she too witnessed a near national breakdown with an inherent consequence of
widespread distress (Reitan, 2003). Moreover, both Elizabeth I and Lady Thatcher had to deal with the power

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struggles between two opposites. The former was caught between Protestantism and Catholicism and the latter
between the Conservative and the Labor Party. In other words, they both had to prove themselves as powerful
and talented leaders in the eyes of their people as well as their enemies. In this respect, the victories at the wars
against Spain in 1588 and against Argentina in 1982 provided the prestige and popularity they looked for.
In 1588, Philip II of Spain attacked England for a number of reasons: the piratical raids of English
sailors on Spanish ships and ports, the intolerable interference of Elizabeth I in the Netherlands and the Pope’s
desire to overthrow Elizabeth I, whom he announced as heretic (Carter &amp; Mears, 1960). The battle drew to a
conclusion with the defeat of the Spanish Armada. This victory not only secured the throne of Elizabeth I but
also made England the most powerful naval force in the world. Thus, it paved the way for England to colonize
North America. In addition, this meant a victory gained against Catholicism. On November 24th 1588, Elizabeth
I gave thanks for the nation’s victory in St Paul’s Cathedral. Hibbert (1990) states that she arrived at the
cathedral in a chariot drawn by two white horses and she was like the Goddess of Victory. From then on, people
admired her so much that whenever the queen passed through the streets, they were eager to show their
adherence.
In the same manner, the Falklands War began when Argentina invaded the Falklands Islands and South
Georgia in April, 1982, propounding the historic claim that the islands belonged to them. The Falklands issue
was regarded as a chance by the governments because neither political nor economic situation was good in either
country. For this reason, this war had important political consequences for both sides. The defeat of Argentina
hastened the downfall of its government. In England’s case it reminded individuals all around the globe that
England still had the power and ability that was so notable in its past. In particular, this victory meant a great
deal to Margaret Thatcher since “Thatcherite triumphalism was born in the Falklands war” (Clarke, 1996: 375
cited in Cross, 2004: 174). It secured a second term as Prime Minister for Thatcher, who hitherto has been
among the most unpopular leaders of Britain. With the advent of victory, people began to regard her as a
powerful leader standing against a foreign power and voted for the Conservatives in the 1983 election (Evans,
2004). Thatcher recognized herself as the savior and unifying force of Britain (Cross, 2004), which reaches its
fullest expression in her remarks on April 25th of 1982. Addressing to the public in front of the cameras outside
10 Downing Street, she wanted them just to rejoice. As Peacock (1999) states, “such self-aggrandizement
exhibited monarchical tendencies.” (p. 19). The fact the Thatcher sunk a battleship and eventually defeated
Argentina- a Spanish speaking nation, identified her in the minds of the people as a second Queen Elizabeth I
(Cross, 2004). However, unlike Elizabeth I, Thatcher was annoyed by the Archbishop of Canterbury at the
service of thanksgiving for the victory which was held at St. Paul’s Cathedral. In his sermon, Robert Runcie said
“War is a sign of human failure, and everything we say and do in this service must be in that context” (Blewett,
2008, p. 4).
Contrary to their parallels in personal character and political history, Queen Elizabeth I and Margaret
Thatcher differ almost entirely when it comes to their portrayal in theater. Elizabeth I manipulated theater to
maintain her power and authority. She herself patronized and protected the theatre. Stephen Greenblatt puts
forward that it is because of the fact that Elizabeth had neither a powerful army nor an extensive police force
(Hall, 1997). However, she had a more powerful thing, which was the pen of Shakespeare. Writing his histories
with a pedagogical and political intention, Shakespeare became her preeminent comrade. By means of these
plays, particularly Henry V, he aimed to “reinforce and consolidate belief in social order based on the power of
the monarch” (Hall, 1997, p. 17). On the other hand, after Margaret Thatcher came to power in 1979, the
contemporary playwrights such as John McGrath, David Hare and Carly Churchill, who criticized capitalism in
their works until that time, saw Thatcherism as a great threat and turned their harsh criticism towards Lady
Thatcher and her policies (Cross, 2004). One play in particular was Berkoff’s Sink the Belgrano!. It is highly
critical of Thatcher and particularly her policies during the Falklands War.
In fact, when Shakespeare wrote his play, Henry V in 1599, it had passed eleven years after the defeat of
Spanish Armada and there were four years to the end of the reign of Elizabeth I. The Golden Age of the British
Empire was near to end and people were wondering who would be the successor of the queen. Moreover, the
threat of war with Spain was still there to be prevented, and Queen Elizabeth was providing help to the
Protestants in other countries (Hall, 1997). This historical and political background makes all the more apparent
to us the fact that Henry V is not just one of those history plays of Shakespeare but that it embodies a profoundly
important mission beneath its surface meaning. As Hall (1997) points out, “the play implicitly reflects
Elizabethan England’s desire for a peaceful succession of the monarchy” (p. 14) while expressing the gratitude
towards the queen. The play is full of implicit references to Queen Elizabeth I herself, her current reign and her
victory on Catholic force of Spanish Armada.
As for Berkoff, he waited four years to write his play, Sink the Belgrano! after the Argentine light
cruiser General Belgrano was sunk by British nuclear-powered submarine Conqueror in 1982. It had been seven
years since Lady Thatcher came to power and she would continue to rule the country for four more years. This
meant that contemporary playwrights shifted their focus away from socialist and Marxist critique of capitalism to

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an emphasis on Thatcherism (Cross, 2004) which aimed at low inflation through controlling the money supply in
the economy, privatization and applying constraints on labor movement. Explicitly criticizing “the jingoistic
patriotism of the Falklands War” (Cross, 2004, p. 170), Berkoff may try to warn about other inherent threats of
Thatcher herself and Thatcherism.
When it comes to their portrait in the plays, however, the names under which they appear immediately
attract our attention. Queen Elizabeth I is replaced by another Tudor king, King Henry V who is in the process of
proving himself a great king and a hero as well through not only his victory at the war with France but also his
decisions concerning the state and his old friends. On the other hand, Margaret Thatcher turns out to be Maggot
Scratcher in the play. This name leaves the impression that she feeds on other people’s death like a maggot and it
can be understood that she gives damage around herself slightly like in the act of scratching. She gains prestige
and popularity by means of 400 dead bodies in sinking the Belgrano. Even John Nott and Francis Pym, who
worked as Secretary of State of Defence during the Thatcher government, are called through different names:
Nott becomes “Nit”, which means a silly or stupid person, and Pym as “Pimp”. These names make it clear how
Shakespeare and Berkoff perceive their characters and their deeds as well.
The difference in their portraits becomes more visible in their deeds and speeches. First of all, both
Henry V and Maggot Scratcher assert a claim on a land which is far away from the home. Henry V has a claim
to the throne of France. His following question to the Archbishop of Canterbury suggests his already desire for
such a claim: “May I right and conscience make this claim?” (I. ii. p. 446). Beneath such a question lies a
sixteenth century fact. In this question, Henry V only looks for a justification for the war because in the sixteenth
century there was the question of whether two Christian states could make war against one another (Campbell,
1970). And the Archbishop of Canterbury explains that one can not inherit the throne through the mother in
France but Henry V can inherit that throne since there is not such a law in England and as he is the grand-grandgrand son of the daughter of the king of France, he can claim the throne to France. Thus, this claim is justified in
the eyes of sixteenth century audience as well. However, there is something disturbing in Maggot’s claim on
Falklands Islands. This is understood in what she says to Pimp: “the land is ours, that’s plain to see.” Maggot
recognizes the islands as her own even though she does not know even how to locate on the map. At one point
she asks “By the way Pimp… where is the Falklands??” Moreover, as one of the farmers living on the island
states, it is Argentina but not England who concerns about their problems:
They’ve done sweet FA all these years
No roads are built, no hospitals…
When we are ill or hurt we fly
To Argy land where Argy hands
Repair our broken bodies or we’d die (Berkoff, 1994, p. 12)
Henry tries to show himself as a king who has been forced to make war against France. He achieves this by
means of allowing the message from the French king to be delivered “freely” and thus showing himself as
gracious (Hall, 1997):
We are no tyrant, but a Christian king;
Unto whose grace our passion is as subject
As are our wretches fetter’d in our prisons: (I. ii. p. 448)
Then he learns about the present of tennis balls from the French king. Realizing the mock under such a present,
Henry states that it is a cause of a war:
And tell the pleasant prince this mock of his
Hath turn’d his balls to gun-stones;
…
Tell you the Dauphin, I am coming on,
To venge me as I may, and to put forth
My rightful hand in a well-hallow’d cause. (I. ii. p. 448)
However, Maggot is shown to have a big desire for war. For example, when Pimp tells her that the Argentine
government wants to make peace terms, Maggot gets nervous and says:
They bloody what? Why peace terms no?
After they shit on our front door (Berkoff, 1994, p. 158)
It seems that she has not become happy with this news as she longs for a war in which she will make “a Spanish
omelette”:
I’ll make a Spanish omelette!
At first I’ll crack some Argy eggs
Throw in some tasty British herbs
Well flavoured with strong English earth (Berkoff, 1994, p. 162)
She needs a war to “establish once again our might and strength, Shake our old mane, out fly the moths” as she
states herself in the play. As Margaret Thatcher declared, “We have ceased to be a nation in retreat. We have

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instead a new-found confidence, born in the economic battles at home and tested and found true 8.000 miles
away” (Young, 1989, p. 281). This was a message generally to the rest of the world and more specifically to the
leftists. In her great desire to prove this, Maggot Scratcher does not miss the chance to sink the Belgrano
although it stays out the Zone and even returning back. Affected by the speech of Tell who tells her to be hard as
steel befitting her name “Iron Lady”, Maggot says:
Then sink the bloody sod, that’s why I say
We’ll change the engagement rules … OK (Berkoff, 1994, p. 181)
and then gives the order:
Then give the order… Let it be swift.
Anyway those bastards started it
Let them now take the consequence… (Berkoff, 1994, p. 182)
However, Margaret Thatcher herself did not admit that the Argentine battleship was sailing back home when she
was questioned on TV a year later during the 1983 election campaign. Mrs. Diana Gould asked the reason to sink
the Belgrano while it was in fact drawing away from the Falklands, the answer of Thatcher was that “But it was
not sailing away from the Falklands” (Young, 1989, p. 286). As Peacock (1999) observes, the decision to sink
the battleship was heroic for her. In such a decision, she demonstrated her characteristics of decisiveness and
fortitude that Young (1989) talks about in his work. If we refer to the play once again, we come across Berkoff’s
explicit criticism in one of the speeches of the Chorus:
Around the world, in every pub,
In every dining room and lounge
The voice of England can be heard
Discussing the Falklands with angry sounds
As if the family jewels had been thieved.
Outraged. The telly on, the pot of tea
Refueling parched throats for verbal war
You’d never believe until last week
They didn’t know Falklands from Leigh-on-Sea. (Berkoff, 1994, p. 169)
Berkoff here criticizes the English public supporting Thatcher on this war and presenting jingoism to a place that
they have not known about anything hitherto. The jingoistic attitudes of the ordinary public are because of the
fact that there exists petrol in Falklands Islands. There is irony in the words “family jewels” pointing out the fact
that the Falkland Islands and the petrol there do not already belong to England.
Contrary to this portrayal, Shakespeare presents Henry V as an ideal hero and achieves to create a mood
of exultation throughout the play (Campbell, 1970). For example, Henry V does not hesitate to execute his
former friend, Scroop when he betrays the king. This shows that Henry V attaches more importance to the safety
of the country than his relationships (Hall, 1997). When Scroop begs forgiveness, King Henry says:
Touching our person, seek we no revenge;
But we our kingdom’s safety must so tender,
Whose ruin you have sought, that to her laws
We do deliver you. Get you, therefore, hence,
Poor miserable wretches, to your death: (II. ii. p. 451)
King Henry once more proves himself when he learns that one of his old friends, Bardolph was killed in the
battle field. He was already sentenced to death by King Henry because of stealing a “pax” from a French church.
This is also evidence to the fact that King Henry gives importance to show respect towards the conquered
country and that “the expedient military leader can not afford to be sentimental” (Hall, 1997, p. 88) as in the case
of Scroop:
We would have all such offenders so cut off: – and we give express charge that in
our marches through the country there be nothing compelled from the villages,
nothing taken but paid for, none of the French upbraided or abused in disdainful
language; for when lenity and cruelty play for a kingdom the gentler gamester is the
soonest winner (III. v. p. 458)
However, celebrating Elizabeth I reaches its fullest expression in the speech Henry delivers before the battle of
Agincourt. This speech becomes “the ultimate proof of Henry’s strength as a leader” (Hall, 1997, p. 90). Stating
that they will fight for honour, justice and glory, Henry manages to encourage and inspire his soldiers and make
them feel that to fight shoulder to shoulder with the King is a sign of brotherhood:
If we are mark’d to die, we are enow
To do our country loss; and if to live,
The fewer men the greater share of honour.
God’s will! I pray thee, wish not one man more.

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By Jove, I am not covetous for gold;
Nor care I who doth feed upon my cost;
It yearns me not if men my garments wear;
Such outward things dwell not in my desires:
But if it be a sin to covet honour,
I am the most offending soul alive.
….
We few, we happy few, we band of brothers;
For he to-day that shed his blood with me
Shall be my brother; be he ne’er so vile,
This day shall gentle his condition: (IV. iii. p. 464)
This famous St. Crispin’s Day Speech immediately reminds one of Queen Elizabeth I’s address to her troops at
Tilbury on 19 August 1588, when they were at the preparation to meet with the Spanish army:
My loving people, we have been persuaded by some that are careful of our safety, to
take heed how we commit our selves to armed multitudes, for fear of treachery; but I
assure you I do not desire to live to distrust my faithful and loving people. Let tyrants
fear. I have always so behaved myself that, under God, I have placed my chiefest
strength and safeguard in the loyal hearts and good-will of my subjects; and therefore
I am come amongst you, as you see, at this time, not for my recreation and disport,
but being resolved, in the midst and heat of the battle, to live and die amongst you
all; to lay down for my God, and for my kingdom, and my people, my honour and
my blood, even in the dust. … I myself will take up arms, I myself will be your
general, judge, and rewarder of every one of your virtues in the field. … but by your
obedience to my general, by your concord in the camp, and your valour in the field,
we shall shortly have a famous victory over those enemies of my God, of my
kingdom, and of my people (Hibbert, 1992, p. 221).
Both of these speeches present King Henry and Elizabeth I as rulers devoted to their country, individuals who
would give their right arm for the sake of their kingdom and their people. Thus, celebrating Queen Elizabeth I,
Shakespeare conveys the message of the importance of obedience to the throne and tries to convince the
Elizabethan audience that a skillful and powerful leader’s concerns lie only with the well-being and stability of
the kingdom and its people. And just as King Henry, Elizabeth I has been a great king and a hero; she had “the
heart and stomach of a king, and of a king of England too” (Hibbert, 1992, p. 221) as the queen herself states at
her Tilbury speech.
As can be deduced, there are a number of parallels between Queen Elizabeth I and Margaret Thatcher.
Even both have a nickname. Elizabeth I was called as the “Virgin Queen” as she chose to remain single
throughout her life, namely her reign. Margaret Thatcher is known as “Iron Lady” because of her tough-talking.
Even tough the women share many similarities in their character and political history, one is celebrated by the
theater of Shakespeare and the other receives harsh criticism from contemporary leading playwrights. While in
the former theatre becomes a propaganda machine for the governments to strengthen their power and maintain
order in the society, in the latter it turns out to be a means for the playwrights to attack the governments and their
foreign policies. All these make it clear that theatre has served as a means of reflecting the characteristics of the
time and some important personalities.

References
Berkoff, S. (1994). The Collected Plays. London: Faber and Faber.
Blewitt, T. (2008). Introduction. In T. Blewitt, A. Hyde-Price &amp; W. Rees (Eds.), British Foreign Policy and
Anglican Church: Christian Engagement with the Contemporary World (pp. 3-8). Hampshire: Ashgate
Publishing Limited.
Campbell, L. S. (1970). Shakespeare’s Histories: Mirrors of Elizabethan Policy. London: Methuen.
Carter, E. H. &amp; Mears, R. A. F. (1960). A History of Britain. London: Oxford University Press.
Cross, R. (2004). Steven Berkoff and the Theatre of Self-Performance. Manchester: Manchester University Press.
Evans, E. J. (2004). Thatcher and Thatcherism. NY: Routledge.
Hall, J. L. (1997). Henry V: A Guide to the Play. Westport: Greenwood Press.
Hibbert, C. (1992). The Virgin Queen: The Personal History of Elizabeth I. London: Penguin.
Peacock, D. K. (1999). Thatcher’s Theatre: British Theatre and Drama in the Eighties. Westport: Greenwood
Press.
Reitan, E. A. (2003). The Thatcher Revolution: Margaret Thatcher, John Major, Tony Blair, and the
Transformation of Modern Britain, 1979-2001. USA: Rowman &amp; Littlefield Publishers, Inc.

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Shakespeare, W. (1987). The Complete Works of William Shakespeare, (Ed.). London: The Hamlyn Publishing
Group.
Thomas, J. R. (1998). Behind the Mask: The Life of Queen Elizabeth I. NY: Houghton Mifflin Company.
Young, H. (1989). One of Us: A Biography of Margaret Thatcher. London: Macmillan.

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