Who Benefits from Civil War? Evidence from Turkey’s Peace Process and Its Collapse

The extant literature on political violence, insurgency, and civil war claims a sweeping homogenous adverse effect on the economy as a whole. Can politically motivated violence enhance the activity of some economic entities while dampening some others? Specifically, can political connections to the incumbent government provide economic value during civil wars in democratic countries?

The paper addresses these questions by studying whether firms with a connection to the incumbent Justice and Development Party earned abnormally high stock returns on the Istanbul stock exchange using event study methodology.  The primary coding exercise is to identify the political connections of the firms that are traded on the Istanbul Stock Exchange. The events considered are the siege of Kobane and the suicide bombing in Suruc province. All those events have a theme in common. Apart from being random and unforeseen, they reintroduced hope for an independent or autonomous Kurdish state. All in all, they ended the peace process between the Kurdistan Workers’ Party (PKK) and the Turkish state that started in 2013. The findings suggest an increase in the stock market prices of the firms that are politically connected to the incumbent Justice and Development Party.  At a first glance the differential effect of these events on politically connected firms can be explained by a rent-seeking mechanism.  During the peace process, the government undertook many infrastructure-building projects in the area. On top of that firms were encouraged to invest in creating job opportunities for the people of the region. The firms that are politically linked to the incumbent government were more likely to be the winners of these development projects.


Educational Campaigns under Civil Conflict: Evidence from Turkey’s “Haydi Kizlar Okula” Campaign

Gender inequality in education is one of the biggest problems in developing countries are facing today as a barrier to development. One of the most popular responses by governments and development organizations to this issue is the adoption of policies aiming to increase female educational attainment. In 2003, Turkey launched a joint campaign with UNICEF to close the gender gap in primary school enrollment by the end of 2005 through the provision of a quality basic education for all girls in 53 provinces with the lowest enrollment rates. The campaign is launched in waves, ten provinces in 2003, and 20 provinces each in 2004 and 2005. There are 81 provinces in Turkey, and the remaining provinces were included in the program in 2006.

This paper exploits the spatial variation in the introduction of the campaign to analyze the effects of the educational campaign. The paper also asks what is the effect of conflict on educational attainment. Evidence suggests that conflict has a strong negative effect on educational outcomes (Kibris, 2015; Chamarbagwala and Moran, 2011). To increase the educational attainment of girls, the Ministry of National Education in Turkey started a countrywide campaign in collaboration with the UNICEF in 2003. By exploiting the spatial variation in the introduction of the campaign, this paper examines the effect of the campaign on schooling rate within a province and across gender. The results suggest an increase in school enrollment in every province and for all kids. However, on a closer look one discovers a discrepancy between the level of schooling for a cohort and the level of literacy for the same cohort in 12 years’ time. I take the analysis to a micro level, and collect data for schooling, literacy rates and conflict occurrences in the district level. I examine whether there is a significant difference between schooling and literacy rates in the areas affected most by the conflict. This exercise is undertaken to provide support for the explanation that cultural rights, such as right to education in one’s mother tongue, are one of the most important manifestations of the effect of civil conflict on education.


Mobilization in Ethnic Conflict: The Political Economy of Kurdish Mobilization in Turkey

Who takes part in civil/ethnic conflict? Is there a certain type of an individual who will choose to mobilize? The previous literature on ethnic conflict and insurgency tried to answer these questions by trying to understand one subgroup and their characteristics, the insurgents. In this book, I will contribute to the literature on conflict by exploiting the variation in the individual choices regarding which side of the conflict they will take part in. Specifically, I will try to explain the variation among individual decisions of Kurdish people (a) that became insurgents, (b) that became state-sponsored militias, (c) that became professional soldiers; in Turkey military service is compulsory but you can become a professional by attending military high school or taking an examination to stay in the army after you conclude your compulsory military service and (d) that are categorized as civilian population. To explain the individual choice, I will exploit within family and across families variation in individual’s education, parental education, forced or voluntary immigration experience, state enforced emergency zone experience, socio-economic indicators.