The EU or national reform program for Turkey: does the political feasibility depend on the EU's absorption capacity?

Official URL: http://dx.doi.org/10.3848/iif.2009.285.2509

Concerns of the EU countries on Turkey's membership are summarized by the term 'EU's absorption capacity'. This implies that Turkey may end lip as a member of the EU or may not. Even the reform process can abruptly come to an end due to reasons irrespective of the performance of Turkey in a two-sector model, we show that despite this uncertainty, if before the start of the reform program a 'no' is perceived as less likely, the W-reform will be supported ex-ante. However, a 'no' at the midst of the EU reform program can block the reform process ex-post, since both of the sectors suddenly find themselves in a position that they should have not accepted beforehand Moreover, such a situation can render continuing with the alternative national reform program very hard. On the contrary, if the probability of a 'yes' is ex-ante perceived as less likely, the traditional sector opposes the EU reform process. However, if this perception is wrong and the true probability of a 'yes' is high, a reform program which if implemented would have been in the interests of both of the sectors ex-post, will not be implemented.