Innovation and Corruption in Turkey: “Grease the Wheels” or “Sand the Wheels”

Introduction

From the start of life till today, the world has been arguing the same specific question “How can we survive?”. Many scientists are trying to investigate this specific question from different points of view. After millions of years passed, our challenge to survive has not been changed whereas it should be focused on not only to survive but also to live in better conditions. The new goal is to improve our lifestyles as well as surviving. From the invention of fire to electricity, life still depends on important inventions. These inventions are needed in all sectors, from health to education, from finance to security. Adam Smith explains why we are working so hard. According to his well-known book “Wealth of Nations,” the self-interest of people is the motivation of working more and being curious about creating new. He summarizes his thought as “Give me that which I want, and you shall have this which you want, is the meaning of every such offer...” (Smith, 1776). This makes sense and can be centralized and generalized for the intention of every behavior of people, enterprises, governments, international unions, and organizations around us. What we do not know is how self-interest can be limited by ethical issues. We may say that self-interest is the main idea behind the motivation of being creative, this idea creates the following question “What if we cross the line?”. Depends on which side of the line (using creativity to solve a problem in an ethical way or an unethical way) we are staying, the result of this solution may vary both for the microeconomy and macroeconomy.

If we stay on the right side of the line, self-interest is the source of motivation for being creative, which ends with creating value for the economy in the long term. On the other hand, if we stay on the wrong side of the economy may lead to the losing ability to grow sustainably. Understandings of creating value may change too. This time the questions might be “Is it possible that our self-benefit turns into someone else’s harm? Are we going to use our talent for creating good/services or are we going to use this talent for lobbying to get things done easily at our business for seeking more rent?”. In this study, we focus on finding answers to those questions.

Figure 1.

Innovation cycle

Source: Authors’ creation

Baumol (1990) also took the attention of his readers to the above questions. In his study he mentions that productive entrepreneurs’ directly or indirectly create value in the economy, namely, they choose to innovate. On the other side unproductive, or even worse destructive entrepreneurs broke this chain by joining rent-seeking or illegal activities, bribing, and various forms of other corrupt activities (Baumol, 1990, 1993; Sauka, 2008).

Especially in the 1990s, the phenomenon called corruption starts to get extremely remarkable. Although it started to become popular in the 1990s, traces of corruption can be found in history. One of the pieces of evidence of corruption was found two thousand years ago in India (Tanzi, 1998). Arthashastra is written by the Prime Minister of the Indian Emperor, Kautilya (350-275 BCE) (he is also known as a philosopher). “Just as it is impossible knowing when a fish moving in water is drinking it, so it is impossible to find out when government servants in charge of undertakings misappropriate money.” (Rangarajan, 1987). In his saying he refers to the appearance of corruption. There is also evidence from the Arthashastra that how corruption may distract the creation of value in the economy “He who causes loss of revenue eats the king’s wealth, (but) he who produces double the (anticipated) revenue eats up the country and he who spends all the revenue (without bringing any profit) eats up the labor of workmen.” (Rangarajan, 1987). After all those years one can easily say that corruption takes more attention than any other time in history (Tanzi, 1998; Ibrahim, 2021).