THE STATE THAT TAKES PLACE BY LEARNING: AN EXPLANATION VIA MECHANISM DESIGN

Abstract

In this study, the type of the state in the process of Turkey's establishment is described from the point of view of economics in the context of the findings of previous studies, using tools of mechanism design. In order to determine the type of the state, it is necessary to first determine the economic purpose of the state. Once the goal function is determined, the proper mechanism should be decided. In other words, a set of strategies that are optimal and consistent with the objective should be determined. Objectives have been identified in previous studies, with special reference to the sugar industry. This study contains an explanation of the mechanism that is proper for the goals, with special reference to the sugar industry. According to the results of the study, in the process of Turkey's establishment, the state acted as an actor with the aim of maximizing public welfare during the capital accumulation process and thus expanding the market for domestic producers and creating market for them. During this process, the state provided incentives to the private sector manufacturer in a certain period of time, within the framework of the periodical targets. Later, the state gave up on this policy and provided incentives to the public firm within the framework of periodical targets. Then the state gave up on this policy. The state ended its quest through trial and error and began to determine price and quantity decisions. Thus, the state here can be called the state that takes part as it learns or the state that replaces it as it learns.