1

PRIVATIZATION OF MUNICIPAL SERVICES IN A MEGACITY: ISTANBUL

Gül Sosay

Boğaziçi University

Department of Political Science and International Relations sosay@boun.edu.tr

Please do not cite without the author’s permission. Paper prepared for presentation at the 22nd World Congress of the International Political Science Association, Madrid, Spain, July 8-12 2012, RC5 & RC32 session on “Provision of Public Services: From Public/Municipal Delivery to Privatization (and Reverse to "Re-Municipalisation"?”

2

Introduction

Since the 1980s, increasing fiscal stress at national and local government levels

facilitated the spread of already on the rise Neoliberal values, policies, and practices. With

respect to public administration, they have been assembled under the label “New Public

Management” (NPM). Like in many other national and local contexts, in İstanbul, NPM

strategies have been considered and implemented in an effort not only to deal with fiscal stress

and budget cuts, but also to meet increasing needs and to improve quality and efficiency in the

provision of municipal services. With a population of about 13 million, İstanbul has reached the

status of a megacity. As its population soared, the city has also expanded geographically, making

local governance and provision of municipal services a daunting task. The objective of this paper

is, first, to analyze the ways in which and the extent to which municipal services have been

privatized in Istanbul. Second, the paper seeks to address the question of whether there is

variance between conservative and social democrat political parties regarding the

aforementioned questions. The study is based on a comparative analysis of three municipalities

governed by conservative Justice and Development Party (JDP, Adalet ve Kalkınma Partisi), one

of which is İstanbul Metropolitan Municipality (İMM), and three municipalities governed by

social democrat Republican People’s Party (RPP, Cumhuriyet Halk Partisi) in İstanbul.

After briefly introducing the ideational background of this paper in the next section, the

legal and regulatory framework for municipalities and municipal services in Turkey as a unitary

state will be presented. This will be followed by a brief note on the sample of municipalities.

Subsequently, in the cases selected, the privatization of the public, as defined in the next section,

in the provision of various municipal services will be empirically examined before reaching a

conclusion regarding its relationship to ideology.

NPM, Privatization of the Public, and Ideology at the Local Level

There has been the emergence and spread of NPM as an alternative paradigm of public

administration at national and local levels since the 1980s. Before the introduction of the term

NPM by Hood in 1991, the “New Right” governments that initiated administrative reforms that

were later to be classified as NPM were theoretically/ideologically oriented towards

neoliberalism. More specifically, as presented by a significant number of scholars, the NPM is

3

constructed on ideas imported from economics to public administration and hence, reflect the

primacy of economic norms and values.1 NPM has its theoretical foundations in economic

organization theories, namely, public choice theory and principal-agent theory, based on the core

assumptions of methodological individualism and an instrumental conception of rationality, and

in managerialism. Advocates of NPM find these theories applicable to public administration

since they do not perceive a fundamental contradiction between the interests of atomistic

individuals’ and the collective public interest and the norm of efficiency and the common good.

Being distrustful of the ability of elected politicians and traditional bureaucrats to serve the

public interest, the promoters of the NPM agenda believe that “a leaner state that costs less but

yet is able to serve the public better than the previous Weberian state”2. Transformation into a

leaner state necessitates reforms not only of the central government institutions at the national

level, but also of local governments.

In relation to much earlier work by Tiebout, the line of thinking inherent in NPM

characterizes local governments as firm-like.3 Since municipalities are conceptualized as firms

and citizen-voters as clients the emphasis is placed on the managerial process and

competitiveness.4 In sum, all these signify the “privatization of the public” in the sense that

market/private sector values penetrate into the public sector. In practice, this involves the

application of diverse strategies and instruments that have been formulated and categorized in

different ways. For the purposes of this study, the components of NPM, identified by Hood,

constitute ample points of reference.5 They include the following:

• “Hands-on professional management”: Active, visible discretionary control of organizations from named persons at the top

• Explicit standards and measures of performance: Definition of goals, targets, indicators of success, preferably expressed in quantitative terms, especially for professional services

• Greater emphasis on output controls: Resource allocation and rewards linked to measured performance; breakup of centralized bureaucracy-wide personnel management

1See, for instance: George A. Larbi, “The New Public Management Approach and Crisis States”, UNRISD Discussion Paper, No. 112, 1999; Tom Christensen and Per Lægreid, “New Public Management: Puzzles of Democracy and the Influence of Citizens”, The Journal of Political Philosophy, 10 (3), 2002, pp. 267-295; Janine O’Flynn “From New Public Management to Public Value: Paradigmatic Change and Managerial Implications”, The Australian Journal of Public Administration, 66, 3:, 2007, pp. 353-366 2B. Guy Peters, “Policy Transfers Between Governments: The Case of Administrative Reforms”, West European

Politics, 20 (4), 1997, pp.72 3 C. Tiebout, C. (1956) A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, pp. 416–424. 4 O. Cooke, “A Class Approach to Municipal Privatization: The Privatization of New York City's Central Park”, International Labor and Working-Class History, 71, 2007, pp. 112-132. 5 Christopher Hood, “A Public Management for All Seasons”, Public Administration, 69, 1991, pp. 4-5

4

• Shift to disaggregation of units: Break up of formerly “monolithic” units, unbundling of U-form management systems into corporatized units around products, operating on decentralized “one-line” budgets and dealing with one another on an “arms length” basis

• Shift to greater competition: Move to term contracts and public tendering procedures • Stress on private sector styles of management practice: Move away from military-style

“public service ethic”, greater flexibility in hiring and rewards, greater use of PR techniques

• Emphasis on greater discipline and parsimony in financial resource use: Cutting direct costs, raising labor discipline, resisting union demands, limiting “compliance costs” to business

As is evident from the brief introduction to NPM above, the term and practice of

“privatization” has gone a long way since the times it was narrowly defined as “the sale of state-

owned (public) enterprises/assets”. For instance, Savas provides a list of nine different usages of

this and related terms, such as “denationalization”/ “destatization”, “divestment”, “competitive

sourcing”, “marketization,” commercialization, and “public-private partnership”.6 International

Labor Office papers by Oestmann and Martin also present definitions and categorizations of

various forms of privatization.7 In order to avoid terminological confusion, this paper will

employ “privatization of the public” as an all-inclusive term to encompass:

• Introduction of market/private sector values, such as efficiency, competition, and

managerialism and of related administrative/managerial strategies and instruments such

as “hands-on professional management”, explicit standards and measures of performance,

output controls, greater flexibility in hiring and rewards, and PR techniques

• Introduction of market forces into the provision of local services: establishment of

municipal corporations operating based on the market logic and rules of the game,

transformation of municipal functions from “making to buying”, delegation through

public tenders and contracts from the public to the private sector, public-private

partnerships

6 E. S. Savas, Privatization in the City: Successes, Failures, Lessons (Washington, DC: CQ Press, 2005) 7 C. Oestmann: Privatization of Public Services and Public Utilities, International Labor Office, Sectoral Activities Programme, Working Paper 70, Geneva, 1994; Brendan Martin, “Privatization of municipal services: Potential, limitations and challenges for the social partners”, International Labor Office, Sectoral Activities Programme, Working Paper 175, Geneva, 2001

5

• Blurring of the distinction between public and private employment, hiring by contract,

marketization (tendering) of employment in the provision of local services, fragmentation

of labor markets

The questions of whether and why the privatization of the public in the provision of

municipal services occurs have been addressed by scholars from various perspectives. In their

review of related literature, Bel and Fageda differentiate the most commonly studied hypotheses

aiming to explain local privatization: 1) Fiscal constraints are likely to lead to more privatization;

2) Cost reduction is an important objective when choosing private production, either through

competition or by the exploitation of scale economies. 3) The relative strength of different

interest groups, such as unions or industrial business, is likely to influence local government

privatization decisions. 4) Left-wing governments will be more reluctant to privatize local

services, while right-wing governments will be more inclined to do so.8

While this study takes the effects of the variables identified in the first two hypotheses,

namely, fiscal contraints and cost reduction, for granted, it focuses on ideology as a variable that

is more likely to explain variance in the privatization of the public in the delivery of municipal

services. Conventionally, right-wing political parties have been linked to more pro-private

business values, whereas left-wing political parties are associated with public values. If these

assumptions are correct, right-wing municipalities should be positively associated with the

privatization of the public and left-wing municipalities should be associated with public

provision of local services. On the other hand, expecting citizens’ “put[ting] aside partisan and

ideological differences to support more efficient service delivery”9, NPM perspectives do not

view ideology as a cause of variation. This study aims to assess whether the ideology holds

against the expectation of NPM advocates in the case of selected municipalities in İstanbul.

Thus far, empirical evidence regarding the ideology hypothesis is mixed; yet, not strongly

supportive. Early analyses on the factors leading to local privatization focus on the paradox of

the reluctance of local governments to privatize despite the evidence of its cost-saving effects

8 Germà Bel and Xavier Fageda, “Why do local governments privatise public services? A survey of empirical

studies”, Local Government Studies, Vol. 33, No. 4, August 2007, pp. 517-534 9 J. A. Brickley and R. L. Van Horn, “Managerial Incentives in Nonprofit Organizations: Evidence from Hospitals”,

Journal of Law & Economics, 45(1), 2002, pp. 227

6

and present ideology as the major constraint to increased privatization.10 In their analytical

review of multivariate empirical literature (28 studies from 6 countries) on the factors explaining

local privatization, Bel and Fageda11 find that among the studies of the U.S. and European local

governments, ideology emerges as a moderately significant explanatory variable for privatization

in a very few studies, such as those by Dubin and Navarro, Walls, et al., Zullo, and Dijkgraaf et

al. for solid waste collection.12 With the exception of these few studies, Bel and Fageda report:

The ideological attitude of the local population is usually found to be insignificant. In fact, one might say that the only systematic result in the empirical literature is the lack of a systematic relationship between local privatisation and ideology. This result is consistent with the argument that local governments are guided by pragmatic rather than ideological motivations.13

Nevertheless, neither Bel and Fageda’s review, nor other studies, such as Fitch’s analysis

of privatization of local water delivery in France and Germany rule out the significance of

political interests. Fitch explores the influence of local interest groups relative to national

political ideology and finds that in privatizing, financial pressures are complemented with the

political interests of the parties involved. She specifically concludes that “it is the economic and

political strength oflocal municipalities that initiates a privatisation process, but the voice of

opposition groups, unions, and NGOs that determine its outcome.” 14 In agreement with this

conclusion, Bel et al.’s review of related empirical literature show that political interests, both

citizen and business groups are significant explanatory variables that affect the processes and

outcomes of privatization at the local level.15

10

R. McGuire, R. Ohsfeldt, and T.N. Van Cott, “The Determinants of the Choice Between Public and Private Production of Publicly Funded Service‟, Public Choice, 54, 3, 1987, pp. 211-230; E.S. Savas, Privatization : The Key to Better Government. Chatham, N.J.: Chatham House Publishers, 1987 11 Bel and Fageda, op cit. 12J. Dubin and Navarro, P. “How Markets for Impure Public Goods Organize: The Case of Household Refuse Collection”, Journal of Law, Economics and Organization, 4(2), 1988, pp.217–241; M. Walls, M. Macauley, and S. Anderson, “Private Markets, Contracts, and Government Provision: What Explains the Organization of Local Waste and Recycling Markets?”, Urban Affairs Review, 40(5), 2005, pp.590–613; R. Zullo, “Determinants of Public Service Privatization and Inter-municipal Contracting”, Paper presented at the 56th annual Meeting of the Labour and Employment Relations Association (LERA, former IRRA), Philadelphia, 5–8 January, 2005; E. Dijkgraaf, R.H.J.M Gradus and B. Melenberg, “Contracting out Refuse Collection”, Empirical Economics, 28(3), 2003, pp.553–570 13 Bel and Fageda, op cit, pp. 527-528. 14

K. Fitch, 2007, “Water Privatisation in France and Germany: The Importance of Local Interest Groups”, Local Government Studies, Local Government Studies, Vol. 33, No. 4, 2007, pp. 590 15

Germà Bel, Robert Hebdon, and Mildred Warner, “Local Government Reform: Privatization and Its Alternatives”, Local Government Studies, Vol. 33, No. 4, 2007, pp. 1-8

7

Rigorous empirical studies of privatization of municipal services in Turkey are scarce.

Underlining that the involvement of both domestic private actors, i.e. foundations (vakıflar) and

artisan unions (esnaf birlikleri), and foreign companies in the provision of local services date

back to the Ottoman period and exemplifying practices of privatization at the local level between

the 1930s and 1970s during the Republican period, Ersöz demonstrates Turkey’s historical

familiarity and experience with such practices.16 During the 1970s, advocacy of the social

democratic precept of “populist municipality” by governing coalitions led by the RPP, was

associated with the public provision of municipal services and even production of necessary

materials by municipalities.17 Descriptive studies of local governments in Turkey since the 1980s

evidence increasing frequency of privatization practices without presenting systematic and/or

comparative analyses of their causes and conditions.18

More recently, Kadirbeyoğlu and Sümer examine the introduction and implementation

neoliberal reforms in two middle-sized provincial municipalities, namely, Çanakkale and Van,

respectively, governed by social democrat Republican People’s Party and more left-wing Peace

and Democracy Party (BDP, Barış ve Demokrasi Partisi), which has organic links with the

Kurdish movement and which follows the political tradition of the parties that have been banned

because of their stance on the Kurdish issue. The findings of the study reveal not only a

transformation from “making to buying”, in the form of contracting out, in the provision of

public transport, water and sewage, cleaning and environment, and technical services in both

cities, but also, based on interviews with municipal officials and employees, an internalization of

the rationale that under the fiscal constraints imposed by the central government, contracting out

is definitely a better way to deliver services once the accountability and responsiveness issues are

clearly formulated.19 In other words, in the cases studied, ideology does not emerge as a

16

Halis Yunus Ersöz, “Yerel Yönetimlerde Özelleştirme Uygulamaları ve Yaygınlık Derecesi”, Çağdaş Yerel Yönetimler, 10, 2, 2001, pp. 31-50 17 Birgül Ayman Güler, Yerel Yönetimler: Liberal Açıklamalara Eleştirel Yaklaşım, Ankara: TODAİE, No:280, 1998 18For instance, see: Tunay Köksal, “Belediye Hizmetlerinin Özelleştirilmesi Yöntemleri ve Uygulamarı”, DPT, No: 2328, 1993; Yerel Yönetimler Araştırma ve Eğitim Merkezi, “Özelleştirmenin Yaygın Durumu, Anket Sonuçları”, Çağdaş Yerel Yönetimler, 7, 1, 1998, pp. 89-103; A. Serap Fırat, “Belediyelerde Özelleştirme Uygulamaları”, Çağdaş Yerel Yönetimler, 9, 1, 2000, pp. 78-90; Filiz Kartal, “Yerel Yönetimlerin Yeniden Yapılanması Çerçevesinde Belediye Hizmetlerinin Özelleştirilmesi: Ankara’dan Örnekler”, Çağdaş Yerel Yönetimler, 9, 1, 2000, pp. 58-80; Tayfun Çınar, “Privatization of Urban Water and Sewage Services in Turkey: Some Trends”, Development in Practice, Volume 19, Number 3, May 2009, pp. 350-364 19 Zeynep Kadirbeyoğlu and Bilgesu Sümer, “The Neoliberal Transformation of Local Government in Turkey and the Contracting Out of Municipal Services: Implications for Public Accountability”, Mediterranean Politics,

8

resistance factor against privatization. If this has also been the case in İstanbul at the level of

metropolitan and selected district municipalities will be investigated below after introducing the

legal and regulatory framework in which these municipalities operate in the next section.

Legal and Regulatory Framework in Turkey

Constitutionally established unitary character of the state together with the centralist state

tradition have had a significant impact on the legal powers accorded to local governments in

Turkey. Accordingly, viewing local governments as an extension of the central government’s

responsibility to provide local public services, the early Municipality Law (No. 1580) of 1930

subjected municipalities to a strong administrative tutelage and excessive financial controls. This

law remained in effect for 75 years. After the worldwide economic crisis of the 1970s coupled

with severe economic problems in Turkey and the rise of the neoliberal trend towards lightening

the administrative and financial burdens of the state as a panacea in the 1980s, local governments

were started to be considered as instruments to reduce the financial burden of the central

government. In this context, in 1981, the junta which took power with the military intervention

of 1980 published two laws (No. 2380 and No. 2464) increasing the financial resources of local

governments, presided by appointed mayors. Upon transition to democracy in 1983, under the

Motherland Party governments, the local governments experienced a functional evolution with

decentralization of a number of administrative powers and responsibilities. However, these

developments did not translate into real financial independence and failed to eliminate centralist

pressures. Without an overall transformation of the legal framework, financial and administrative

autonomy of local governments remained very limited.20

Meanwhile, with the adoption of the Law on the Administration of Greater City

Municipalities (Büyük Şehir Belediyelerinin Yönetimi Hakkında Kanun) (No. 3030) in 1984, the

forthcoming 20 For analyses of the period before 2004, see, for instance, Bayraktar, S. U., “Turkish Municipalities: Reconsidering Local Democracy Beyond Administrative Autonomy”, European Journal of Turkish Studies, 2007, available at http://www.ejts.org/document1103.html; İncioğlu, N., “Local Elections and Electoral Behaviour’ in Sayarı, S. and Esmer, Y. (ed.), Politics, parties, and elections in Turkey, London, Lynne Rienner Publishers, 2002, pp. 73-90; Görmez, K.., Yerel Demokrasi ve Türkiye, Ankara, Cadi yay., 1997; Mumcu C. and Ünlü, H., “İdare Hukuku Açısından Belediye Kanunu (Municipal Law in the Administrative Code Perspective)” in Türk Belediyeciliğinde 60 Yıl Bildiri Metinleri (60 Years in Turkish Municipalism Conference Proceedings), Ankara, Metropol İmar A.S. and IULA-EMME, 1990, pp. 107-118; Heper, M., Local Government in Turkey: Decentralizing the Metropolis, Routledge, 1989.

9

status of “greater city municipality” (“büyükşehir belediyesi”)21 was introduced into the Turkish

local government system and the first elections for these municipalities took place in the same

year. The Law provided that where there was more than one administrative district (ilçe) within

the boundaries of the municipality, a greater city municipality would be established. In relation

to the topic of this report, the Law granted greater city municipalities the authority to make and

implement urban transportation master plans. Although this Law went out of effect in 2004, this

provision was kept in the new legislation on greater city municipalities.

The Municipality Law (Belediye Kanunu) (No.5393) and the Greater City Municipality

Law (Büyükşehir Belediye Kanunu) (No: 5216) that are currently in effect in Turkey were passed

in 2005 and 2004, respectively. Greater City Municipality Law provides that provincial

municipalities with, according to the most recent census, a total population of more than 750.000

within municipal boundaries and settlement units at most 10.000 meters away from these

boundaries, taking into consideration their physical settlement conditions and levels of economic

development, may be converted into a greater city municipality (Article 4). This Law covers only

greater city municipalities and the district municipalities within their boundaries whereas the

Municipality Law applies to all municipalities. Identifying municipalities as “public corporate

entities with administrative and financial autonomy”, both laws delegate more competences and

provide more resources to local governments than the preceding laws.

The two national-level laws on municipalities and greater city municipalities also provide

the general legal framework in which local governments can make capital investments, set up

public, semi-public and private companies, and engage in marketization or privatization to

provide municipal services in Turkey. According to Article 70 of the Municipality Law and

Article 26 of the Greater City Municipality Law, municipalities and greater municipalities, in

areas of duty and service under their mandate and in accordance with procedures specified by

related legislation, can establish stock corporations (“sermaye şirketi”). Additionally, Article 18/i

of the Municipality Law specifies that the Municipal Council, within the municipal budget and

subject to the Turkish Commercial Code, can decide on the establishment and termination of

partnerships, including real-estate investment partnerships, as well as on capital increases in

these enterprises. With the exception of capital increases in already established partnerships,

21 This is the term used in the Turkish administrative law. The term alternatively used in English is “metropolitan”. In this paper, the two terms will be used interchangeably.

10

these decisions of the Municipal Council are subject to the approval of the Council of Ministers

(via the Ministry of Internal Affairs) by the Law Regarding Privatization Applications

(Özelleştirme Uygulamaları Hakkında Kanun) (No. 4046).

Article 18/j of the Municipality Law also authorizes the Municipal Council, on behalf of

the municipality, to decide on granting of franchise, carrying out of municipal investments on the

basis of build-operate or build-operate-transfer models, and privatizing of the companies,

enterprises and subsidiaries of the municipality. In the adoption and implementation of these

decisions, the municipalities are bound by the provisions of the Public Procurement Law (Devlet

İhale Kanunu) (No. 2886) and the Public Financial Management and Control Law (Kamu Mali

Yönetimi ve Kontrol Kanunu) (No. 5018). All in all, while it incorporates various mechanisms of

political, financial and judicial oversight of municipal budgets and economic activities including

foundation of corporations and partnerships, capital investment, marketization and privatization

of municipal services, the legal framework in Turkey provides local governments with

significant financial and technical instruments that allow NPM applications.

In Turkey, still other legal constraints that that have facilitated and encouraged the

privatization of the public, specifically the transfer of work away from full time, tenured public

employment directly by the municipality to contract bound employment, are included in Law

No. 5393. Aiming to reduce costs and impose fiscal discipline on local governments, the Law

provides that the number of personnel employed by the municipalities is limited by the overall

budget of the previous year and for municipalities with an urban population larger than 10.000,

the expenditure on personnel wages cannot exceed 30 % of the budget. Municipalities that

surpass this quota cannot hire anyone else until their personnel expenditures are reduced.

Moreover, if the excessive spending of a municipality is caused by employment, the deficit is to

be personally compensated by the mayor.

As of 2000, what is known as “norm cadres” where job definitions and requirements for

each position, and how many personnel for each job definition a municipality can hire depending

on the population and type22 of the locality, are determined by the central government through

regulations. For services that fall outside the job descriptions of municipal personnel as specified

by “norm cadres”, contracting out is required. For some services that are within job descriptions,

limitations on the number of personnel that can be employed directly by the municipality also

22

There are different allowances for municipalities which are in zones of tourism or industry and trade.

11

necessitate contracting out in order to recruit additional labor force to provide basic municipal

services, such as garbage collection.

Furthermore, the Law No. 5393 provides that municipalities, in accordance with “norm

cadres”, can hire individuals by yearly contracts. The Law covers a wide range of professions

and jobs related to health, veterinary, environmental, legal, educational, urban planning,

technological, and technical services. For services carried out by contractual personnel, full time

civil servants cannot be appointed even when there are unoccupied cadres.

In sum, based on the legal and regulatory structure that has been established,

municipalities, in addition to hiring full time civil servants and permanent workers with full

social benefits, can mobilize the labor force necessary to provide services by rely more flexible

and lower-cost means. Besides those speficied above (i.e. municipal hiring by yearly contracts,

hiring by private firms in the provision of contracted out services), municipalities can also

employ seasonal and temporary workers for at least 30 days and at most six months. The total

number of these workers cannot exceed 40 % of the total number of norm cadres. The

consequence of all these arrangements is the creation of a fragmented labor market.

Last, but certainly not the least, the Public Financial Management and Control Law that

introduced the NPM logic and practices to all institutions of public administration in Turkey, has

also played a significant role in the restructuring of municipalities. The Law requires all

institutions of public administration to establish missions and visions, to specify strategic goals

and measurable targets, to measure their performance based on pre-determined performance

indicators, and in order to monitor and evaluate this process, to prepare strategic plans within the

framework of development plans, programs, related legislation and the basic principles adopted.

The Sample of Municipalities in İstanbul

In addressing the question of whether ideology matters in the privatization of the public

at the local level, this paper focuses on six municipalities, one of which is the metropolitan

municipality, in İstanbul. In addition to which political party is currently governing the

municipality, selection of district municipalities has been based on size and composition. Those

that have been chosen are, mid-sized (in terms of population) municipalities that are neither

heavily residential, nor commercial. The geographical areas, populations, and by which political

parties they have been governed since 1984, the year metropolitan municipalities are established

12

by law in Turkey, are presented in Table 1. The results of all local elections since 1984 are

included in the Table so as to be able to assess the continuity in the ideological commitments of

the constituencies over time.

Area (km2) Population(2011)* 1984 1989 1994 1999 2004 2009 İMM 5343 13.483.052 MP** RPP WP*** VP JDP JDP Beşiktaş 18.04 187.053 MP SPP SPP MP RPP RPP Beyoğlu 8.96 248.206 MP SPP WP VP JDP JDP Fatih 15.93 429.351 MP SPP MP VP JDP JDP Kadıköy 25.07 531.997 MP SPP SPP RPP RPP RPP Sarıyer 151.26 255.692 MP SPP WP MP JDP RPP Table 1 *Source: Turkish Statistics Institute (TÜİK, Türkiye İstatistik Kurumu), Address-Based Population Registration System, 2011 ** As all pre-1980 political parties were closed down and their leaders were banned from politics by the military junta that took over power in 1980, MP emerged as the new and dominant political party during the early years of Turkey’s transition to democracy in 1983. ***WP was closed down in 1998 to be re-constituted in VP, which, in turn, was closed down in 2001 to be divided and re-constituted in two political parties, one of which was JDP. All three are in Islamist-conservative tradition.

JDP: Justice and Development Party (Adalet ve Kalkınma Partisi) - conservative MP: Motherland Party (Anavatan Partisi) – conservative RPP: Republican People’s Party (Cumhuriyet Halk Partisi) – social democrat SPP: Social Democratic Populist Party (Sosyal Demokrat Halkçı Parti) – social democrat VP: Virtue Party (Fazilet Partisi) - conservative WP: Welfare Party (Refah Partisi) – conservative

As Table 1 reveals, with the exception of the 1989 local elections, which resulted in the

victory of social democrat parties in all the municipalities studied, conservative political parties

in general, Islamist conservative political parties in particular have triumphed at the metropolitan

municipality level since 1994. The dominance of conservative political parties since 1994 can

also be observed in the cases of Beyoğlu and Fatih district municipalities. Kadıköy is the only

municipality where social democratic political parties have won all local elections since 1989.

While this case may be indicative of the ideological commitments of voters in Kadıköy, the cases

of Beşiktaş and Sarıyer, where conservative and social democrat parties have alternated office

since 1984, may evidence that considerations related to the candidates, rather than political party

or ideological loyalties determine electoral outcomes at the local level.

13

The Privatization of the Public in the Provision of Municipal Services in İstanbul In this section, the privatization of the public in the delivery of municipal services in the

cases selected will be investigated based on the indicators formulated in the first section of this

paper. As presented above, the legal and regulatory framework that has been established in

Turkey since the 1980s impose significant fiscal constraints and mechanisms of political,

financial and judicial oversight over municipal budgets and economic activities while it

authorizes various ways in which the public can be privatized.

First, the Public Financial Management and Control Law, which binds not only local

governments, but all institutions of public administration, brings in private sector values and

related administrative/managerial strategies and instruments into the public sector. In compliance

with the Law, all municipalities under examination establish missions and visions, specify

strategic goals and measurable targets, measure their performance based on pre-determined

performance indicators, and prepare “strategic plans” in order to monitor and evaluate this

process. In addition to these long term “strategic plans”, the municipalities also issue annual or

biannual “performance programmes” specifying explicit standards and measures of performance

and “annual reports of activities” including a summary of their annual activities in the delivery of

municipal services and their economic accounts. These practices also demonstrate the greater

emphasis put on output controls in Turkey’s legal and regulatory structure regarding public

administration in general and local governments in particular.

A careful reading of the aforementioned documents also evince that they are not only

official documents issued to fulfill legal requirements, but also means of PR for the

municipalities. Furthermore, although it requires a systematic and in-depth analysis that is

outside the scope of this paper, the significant increase in the municipalities’ use of PR

techniques associated with the private sector is readily observable.

The rest of this section will first concentrate on the establishment of municipal

corporations in different areas of municipal service. Subsequently, the privatization of the public

by various means in specific areas of municipal delivery will be examined within the context the

selected municipalities. The section will conclude with an inquiry into the marketization of

employment in different forms across municipal service areas.

14

Establishment of Municipal Corporations

With the wide array of services it provides, İstanbul Metropolitan Municipality (İMM)

tops all İstanbul municipalities in the number of subsidiary corporations. These corporations are

labelled as “affiliates” (“iştirakler”) and coordinated by its Directorate for the Coordination of

Affiliates (İştirakler Koordinasyon Şube Müdürlüğü), instituted in 1987 with the approval of the

Ministry of Internal Affairs. Categorized according to their areas of operation, these İMM

affiliates are the following.

Energy, Natural Gas Distribution

• İstanbul Gas Distribution Corporation (İGDAŞ, İstanbul Gaz Dağıtım A.Ş.) was established in 1986 to build infrastructure and distribute natural gas.

• İstanbul Energy Industry and Trade Corporation (İstanbul Enerji Sanayi ve Ticaret A.Ş), which is a restructed and renamed (2006) municipal formation originally established in 1962. In addition to its function of importing natural gas, the corporation is also involved in the development of environmentally-friendly alternative energy technologies.

Public Transportation:

• İstanbul Transportation Maintenance Corporation (İSBAK A.Ş., İstanbul Belediyeler Bakım Ulaşım Telekomünikasyon San. ve Tic. A.Ş.) was founded in 1986, to produce traffic signalization systems for the greater Istanbul area, to carry out traffic, planning and feasibility studies, to produce superstructure equipment for signalization and junction control devices, and to provide traffic and system engineering.

• İstanbul Sea Buses Corporation (İDO A.Ş., İstanbul Deniz Otobüsü A.Ş) was founded in 1987 with the objective of contributing to public sea transportation that had been exclusively provided by the Turkish Maritime Enterprises Co. (Türkiye Denizcilik İşletmeleri A.Ş., TDİ), and to the solution of the traffic congestion problem in the city. In June 2011, İDO was privatized and sold to TASS (Tepe-Akfen-Souter-Sera) Joint Venture Group, the highest bidder in the tender. Hence, it is no longer a municipal affiliate.

• İstanbul Autobus Corporation (İstanbul Otobüs A.Ş.), established in 2009, is authorized with a wide range of land (with the exception of rail systems) and air transportation services.

• İstanbul Transport Corporation (İstanbul Ulaşım A.Ş.) was founded in 1988 to operate and provide the maintenance and repair of rail system lines, the construction of which have been completed. It is the operator of all metro, tram, LRT (Light Rail Transport system), funicular, and cable car lines in İstanbul.

• İstanbul Parking Management Corporation. (İSPARK, İstanbul Otopark İşletmeleri A.Ş.) was established in 2005 to take over, manage, and operate open and multi-storey parking lots as well as streetside parking spaces belonging to the İMM.

• İstanbul City Lines Tourism Corporation (İstanbul Şehir Hatları Turizm Sanayi ve Ticaret A.Ş.), which provides sea transportation services as well as maintenance and

15

repair of city line boats, ferries, and scaffolds, is an establishment that dates back to the 19th century. After having been managed and operated by various public agencies over the years, in 2005, it was tranferred to İDO and in 2010, it was converted into a subsidiary of İMM and got its present title.

Environment

• İstanbul Environmental Management Corporation (İSTAÇ, İstanbul Çevre Yönetimi Sanayi ve Ticaret A.Ş.), which was established in 1994, is responsible for waste management.

• İstanbul Tree and Landscape Corporation (İstanbul Ağaç ve Peyzaj A.Ş.) was founded in 1998 for the plantation and care of trees and other landscaping works.

Construction and Reconstruction

• İstanbul Istanbul Concrete Elements and Ready Mix Concrete Plants Corporation (İSTON, İstanbul Beton Elemanları ve Hazır Beton Fabrikaları San. Ve Tic. A.Ş.) was established in 1986 to meet the superstructure and infrastructure needs of the city by producing construction materials and providing relevant contracting and consultancy services.

• İstanbul Asphalt Corporation (İSFALT A.Ş., İstanbul Asfalt A.Ş.) was established in 1986 to build all facilities necessary for the production of asphalt and to produce and meet the asphalt demands of the greater Istanbul metropolitan area.

• İstanbul Housing, Reconstruction and Planning Corporation (KİPTAŞ, İstanbul Konut İmar Plan San. Ve Tic. A. Ş.), in which the İMM has 35 % share, was founded in 1995 to develop and invest in rela property, to buy, sell, lease, and rent.

• İstanbul Reconstruction Corporation (İstanbul İmar A.Ş.), which is an affiliate that has been restructured in 2005, engages not only in building new property, but also in rebuilding, restoring, maintaining, and repairing of buildings.

• Boğaziçi Management Corporation (Boğaziçi Yönetim A.Ş.), which was instituted in 1997, manages the housing projects built by KİPTAŞ and the Housing Development Administration of the Prime Ministry.

Research and Development, Information Processiong, Consultancy

• The Municipal Data Processing Corporation of Istanbul (BELBİM A.Ş. , İstanbul Belediyeler Bilgi İşlem Sanayi ve Ticaret A.Ş.) was instituted in 1987 to provide data processing, project design, mapping and planning services as well as electronic and electromechanical equipment for the municipal administrations of Istanbul, their partnerships and other state and private companies.

• İstanbul Enginering and Consultancy Services Corporation (BİMTAŞ A.Ş., İstanbul Mühendislik ve İstişare Hizmetleri Şirketi) was established in 1997 to provide consultancy and engineering services, including laboratory testing and analyses, for any and all projects related to city planning and urbanization.

• İstanbul Applied Gas and Energy Technologies Research and Engineering Corporation (UGETAM, İstanbul Uygulamalı Gaz Ve Enerji Teknolojileri Araştırma Mühendislik

16

Sanayi Ticaret A.Ş) was established in 1994 to develop technologies and provide training, certification, engineering, and consultancy services in the areas specified.

Business, Trade, Culture, Tourism, Food and Drinking Water

• İstanbul World Trade Center Corporation (İstanbul Dünya Ticaret Merkezi A.Ş), in which İMM currently has a 23.89 % share, was established as a private initiative in 1982 to promote domestic and international trade. The other shareholders are İstanbul Chamber of Commerce (41.47 %), The Union of Chambers and Commodity Exchanges of Turkey (27.24 %), Bakırköy Municipality (5 %), İstanbul Chamber of Industry (0.96 %), İstanbul Commodity Exchange (1.43 %) Economic Development Foundation (0.01 %)

• İstanbul Culture Corporation (İstanbul Kültür ve Sanat Ürünleri Ticaret A.Ş.) was established in 1989 to provide culture, art, and tourism services.

• Şişli Culture Corporation (Şişli Kültür ve Ticaret Merkezi İşletme ve Ticaret A.Ş./ Cevahir Alışveriş Merkezi), in which the İMM had 39.95 share, was established in 1999, to buy, sell, rent, manage, and organize all kinds of business, trade, accommodation, and entertainment centers and areas. The corporation, the rest of the shares of which belonged to a Turkish holding company, has recently been sold to a foreign investor.

• İstime Media Corporation (İstime Medya Bilgi İletişim Basım Yayın Reklam Hizmetleri Sanayi ve Ticaret A.Ş) is the most recently (2011) established affiliate of the İMM. Its first project is going to be to operate a TV channel.

• Great İstanbul Education, Tourism, and Health Investments Management Corporation (BELTUR, Büyük İstanbul Eğitim Turizm ve Sağlık Yatırımları İşletme ve Tic. A.Ş) was instituted in 1997. Although goals in various sectors are specified in its founding document, BELTUR focuses on the restoring and managing of historical buildings where it provides restaurant services.

• Hamidiye Corporation (Hamidiye Kaynak Suları Sanayi, Turizm ve Ticaret A.Ş.) is a restructured institution dating back to 1902. Among many private competitors, it provides drinking water to İstanbul residents.

• İstanbul Bread Corporation (İstanbul Halk Ekmek A.Ş.) has been producing and selling cheaper bread and other bakery products since 1978.

Health and Sports

• İstanbul Metropolitan Municipality Health Corporation (Sağlık A.Ş., İstanbul Büyükşehir

Belediyesi Sağlık A.Ş.) was established in 1998 to provide municipal health and social services.

• İstanbul Sports Activities and Management Corporation (SPOR A.Ş., İstanbul Spor Etkinlikleri ve İşletmeciliği A.Ş.) was founded in 1989 to build and manage sports complexes.

What emerges from this inventory, excluding those the origins of which date back to the

period before the creation of metropolitan municipalities, namely, the two basic needs (drinking

water and bread) firms and the one established upon private initiative in 1982, is summarized in

Table 2. As Table 2 demonstrates, excluding the three aforementioned ones and with the

17

exception of the Culture Corporation and Sports Corporation which were founded under the

municipal governance of RPP after the local elections of March 1989, all other metropolitan

municipal corporations have been created and two privatized under the municipal governance of

conservative political parties, between 1984 and 1989 and from 1994 till the present.

Years Political Party Ideology Mayor No. of municipal corporations established

No. of municipal corporations privatized

Total No. of municipal corporations

Pre-1984

3 3

1984-1989 Motherland Party

Liberal, conservative

Bedrettin Dalan

7 10

1989-1994 Republican People’s Party

Social democrat

Nurettin Sözen

2 12

1994-1998 Welfare Party Islamist, conservative

Recep Tayyip

Erdoğan

7 19

1998(9)*-2004

Virtue Party Islamist, conservative

Ali Müfit Gürtuna

1 20

2004- Justice and Development Party

Islamist, conservative

Kadir Topbaş

6 2 25

Table 2 *The Welfare Party was closed and Recep Tayyip Erdoğan was arrested in 1998. The Virtue Party was the newly founded successor of the Welfare Party and Ali Müfit Gürtuna was appointed for a year and then elected in 1999 local elections.

When the district level municipalities are compared, a similar ideological differentiation

does not emerge. Among the municipalities observed, Beyoğlu and Kadıköy municipalities,

currently under JDP and RPP governance, respectively, do not have municipal corporations. In

Sarıyer, the establishment of two corporations, to be named Tourism Corporation (Turizm A.Ş.)

and Sarıyer Municipality Institutional Corporation (Sarıyer Belediyesi Kurumsal A.Ş.) has been

on the agenda under RPP governance; however, they have not been formalized yet.

Contrary to expectations, the affiliates of Beşiktaş and Fatih municipalities, which are

currently governed by RPP and JDP, respectively, were both instituted in their present form

under the governance of Social Democratic Populist Party (SPP) in the mid-1990s. Beşiktaş

Municipality Management Corporation (BELTAŞ A.Ş., Beşiktaş Belediyesi İşletmecilik Sanayi

ve Ticaret A.Ş.) was first created in 1989 with the limited objective of operating municipal

18

markets. In 1995, under the governance of SPP, it left this sector and rented out its stores. Since

then, the corporation has been engaging in diverse activities including management of culture

centers and art galleries, parking facilities, and sports complexes as well as maintenance and care

of parks and gardens, organizational services, and open air advertising. In Fatih, Halktaş Fatih

Municipality Construction, Fuel, Cleaning, Education, and Parking Management Corporation

(Halktaş Fatih Belediyesi İnşaat Akaryakıt Temizlik Eğitim Otopark İşletmecilik İç ve Dış

Ticaret A.Ş.) was founded under the governance of Social Democratic Populist Party (SHP) in

1993. Activities in its portfolio include, construction and contracting, maintenance and repair of

roads, curbs, asphalt pavings, pavements, canals, waterways, parks and gardens; buying, selling,

leasing, importing and exporting of machines and equipment related to these activities; and

provision of project and engineering services.

Public Transportation

In Turkey, as the duties and responsibilities of district municipalities are limited to their

municipal borders, city-wide public transportation is provided under the authority of city or

metropolitan municipalities. In this case, it is İMM. In İstanbul, İMM relies on the transportation

services of four different local operators. Three of these, namely, İstanbul Autobus Corporation,

İstanbul Transport Corporation, and İstanbul City Lines Tourism Corporation, are among the

municipal corporations listed above. As also mentioned above, İstanbul Sea Buses Corporation

which was founded as a municipal affliate in 1987, was privatized in 2011.

In the provision of public transportation services, addition to setting up affiliates, İMM

has been also engaging in public-private partnerships by incorporating privately-owned, so called

“Private Public Buses” (Özel Halk Otobüsleri, ÖHO) into its urban bus system. Autobus lines are

rented (“hat kiralama”) based on sharing of revenues, through competitive tenders organized by

İstanbul Autobus Corporation. The management, execution, and supervision of private public

buses as well as public buses are carried out by İMM’s İstanbul Directorate General of

Electricity, Tramway, and Tunnel Enterprises (İstanbul Elektrik, Tramvay ve Tünel İşletmeleri

Genel Müdürlüğü, İETT), which, with its own public buses, is also the fourth local operator in

the city.

Municipal laws grant the municipalities the authority to grant licenses to all vehicles of

mass transportation and to determine the numbers, ticket prices and tariffs, timetables, and

routes/lines of all kinds of services and public transport vehicles on land, water, and sea. Hence,

19

İMM inevitably has to not only authorize and regulate, but also work together with the owners

and operators of all private vehicles of urban transport, namely, taxis, shared taxis (dolmuş),

minibuses, service vehicles, and small boats.

Most of the public transportation services provided by district municipalities in İstanbul

are specific-purpose. They are made available for instance, for handicapped individuals, dialysis

patients, distribution of food to the poor from local public kitchens, funerals, local sports clubs,

local cultural organizations and activities. In addition, Beşiktaş municipality offers ring services

free of charge within municipal boundaries and Fatih municipality provides ring services free of

charge from various points in the municipality to the Metrobus line. For these services, district

municipalities either use their own vehicles or contract the services out via tenders.

Water and Sewage Services

Provision of city-wide water distribution and sewage services is the responsibility of the

İMM. This is one of the few municipal services that has remained under “public” provision in

the conventional sense. The related public agency is İstanbul Water and Sewage Administration

(İSKİ, İstanbul Su ve Kanalizasyon İdaresi). When it was first established in 1981, İSKİ was

independent of the Istanbul Municipality. After the reorganization of the municipality as

metropolitan administration in 1984, the two were merged. İSKİ is now a public entity with an

independent budget, albeit subordinated to the İMM.

Technical Services

Technical services are services related to construction works. Specifically, they include

the construction and maintenance of roads, roadsides, sidewalks, overpasses, underpasses, public

squares, parking facilities, municipal buildings, public schools, cultural, sports and health

facilities, reconstruction and restoration of historical buildings and sites. In Turkey, while district

municipalities provide these services within their municipal boundaries, metropolitan

municipalities are in charge of main arteries, tunnels, and rail systems and parks, buildings,

facilities, and sites under their mandate in different localities across the city. In İstanbul,

technical services are among the most heavily contracted out services.

While systematically collected data since 1984 are not available, for the period between

the second half of 2011 and the first half of 2012, all-inclusive data are available at Kamu İhale

20

Bülteni (Public Tender Bulletin). The numbers of tenders invited by the selected municipalities

for services under this category are presented in Table 3 and do not reveal a difference along

ideological/political party lines.

İMM Beşiktaş Beyoğlu Fatih Kadıköy Sarıyer JDP RPP JDP JDP RPP RPP 86 6 7 12 29 12

Table 3: Numbers of tenders for technical services (the second half of 2011 and the first half of 2012) Source: Kamu İhale Bülteni (Public Tender Bulletin) available at http://www.kamuihalebulteni.com/

Cleaning and Environmental Services

Solid waste collection, disposal, and management, recycling and daily sweeping and

cleaning of the streets are the cleaning and environmental services that are to be delivered by

local governments. Privatization in the form of contracting out of these services has increasingly

and rapidly become common practice across municipalities in Turkey. Especially, contracting

out garbage collection has been almost an unstoppable trend since the early 2000s in the

country.23

In the delivery of cleaning and environmental services, there is also a division of labor

between metropolitan and district municipalities. District municipalities are responsible for daily

needed services, such as garbage collection and cleaning of streets and are also increasing their

functions related to recycling. In services related to solid waste, İMM takes on the job after daily

collected solid waste is transported by district municipalities to İMM facilities. As such, İMM is

the actor in charge of processing and managing solid waste. Cleaning of main arteries is also

carried out by İMM.

For solid waste management, İstanbul Environmental Management Corporation (İSTAÇ,

İstanbul Çevre Yönetimi Sanayi ve Ticaret A.Ş.) was created in 1994 as an affiliate (i.e.

municipal corporation) of İMM. The scope of functions, which İSTAÇ carries out within the

framework of the European Union Norms of Waste Management, includes household and

medical waste disposal, recycling of packaging waste, management of construction and

demolition waste, installation and operation of landfill sites, waste treatment of leachate,

landfill gas power generation, waste collection and disposal of ships and the sea surface, coastal,

beach and river mouth cleaning, cleaning of main arteries, squares and streets, production and

23 Kadirbeyoğlu and Sümer, op.cit.

21

recovery of organic waste compost, and disposal and recycling of industrial waste. In performing

its functions, İSTAÇ also invites tenders for services and personnel.

Evidence from the five İstanbul district municipalities included in this study does not

reveal uniform practice across municipalities. In both Beşiktaş (RPP) and Fatih (JDP)

municipalities, collection of solid waste, its transport to İMM transfer stations, and sweeping of

streets are contracted out to private firms through tenders. On the other hand, in Beyoğlu (JDP)

municipality, garbage collection is contracted out, whereas sweeping services are directly

delivered by the municipality. While not relying on contracting out of any of these services to

private companies, Kadıköy (RPP) municipality opens tenders to employ cleaning personnel. For

instance, it hired 140 cleaning workers through tenders in 2011. Among the selected district

municipalities, Sarıyer (RPP) municipality is the only one that continues to carry out these

services solely with municipal resources. Nevertheless, on the whole, the observed variance

across municipalities does not provide sufficient support to the hypothesis that social democratic

parties will be more resistant to NPM reforms and hence, less likely to engage in the

privatization of the public than conservative political parties.

Parks and Gardens

Municipal powers and responsibilities regarding the building, maintenance, and care of

groves, parks, gardens, roadsides, traffic and safety islands in İstanbul are divided between İMM,

the powers and responsibilities of which are spread across the city, and district municipalities

which provide these services within the limits of their own municipal borders.

During the period between the second half of 2011 and the first half of 2012, the numbers

of tenders opened by all selected municipalities for the delivery of parks and gardens services are

presented in Table 4. For the delivery of parks and gardens services, some district municipalities,

such as Fatih, depend on contracting out, while others, such as Beşiktaş and Kadıköy, also utilize

their own resources besides contracting out.

İMM Beşiktaş Beyoğlu Fatih Kadıköy Sarıyer JDP RPP JDP JDP RPP RPP 5 4 5 8 8 4

Table 4 Source: Kamu İhale Bülteni (Public Tender Bulletin) available at http://www.kamuihalebulteni.com/

22

İMM, in addition to relying on private contractors, has an affiliate for the plantation and

care of trees and other landscaping works. İstanbul Tree and Landscape Corporation (İstanbul

Ağaç ve Peyzaj A.Ş.) was founded as a municipal corporation in 1998. As a corporation, in its

area of operation, it can import, export, engage in domestic trade, establish private educational

institutions, make franchising, brokerage, subcontracting, distribution, and agency agreements,

and partnerships in and out of Turkey.

Marketization of Employment

Introduction of greater flexibility in hiring as still another indicator of the penetration of

private sector styles of management practices into the public sector in the cases studied has led to

a fragmented employment structure, including full time civil servants and workers, municipal

personnel under contract, seasonal and temporary workers directly hired by municipalities,

workers hired by municipal affiliates and by private contractors. This makes it very difficult,

even impossible to reach comprehensive and accurate statistics and thus, present a very

systematic analysis. Nevertheless, based on data that are available, it is possible to observe a

pattern towards increased marketization of employment in the municipalities analyzed.

The proportions of municipal personnel under contract in all selected municipalities for

various years are presented in Tables 5 through 10. In all six cases, the increasing trend is

evident. The over-time increase has been most remarkable in the JDP-governed İMM, where the

share of the personnel under contract reached almost 20 % in the distribution by employment

type in 2008. According to 2011 data, in the other two JDP municipalities, namely, Beyoğlu and

Fatih, personnel under contract constitute around 10 % of the total municipal employees. In two

RPP municipalities, namely Beşiktaş and Sarıyer, the share of the personnel is much lower than

in the rest of the sample. While this observation may be somewhat viewed as providing some

support for the ideology hypothesis, data from the RPP-governed Kadıköy municipality where

most recently, 15 % of the municipal personnel has most been under contract suggests otherwise.

There is also evidence that in Kadıköy municipality, only one-fifth of the number of total

employees are in full-time, tenured positions.24

24

“CHP'li belediyeler taşeronlaşmaya savaş mı açtı?”, Sol Haber Portalı, January 7, 2011 available at: http://haber.sol.org.tr/devlet-ve-siyaset/chpli-belediyeler-taseronlasmaya-savas-mi-acti-haberi-37755

23

2004 2005 2006 2007 2008 2009 Civil servants 44.4 45.5 38 40.2 37.6 43.6 Workers 55.3 53.8 50 44.9 42.5 39.6 Personnel under contract 0.4 0.4 12 14.9 19.9 16.8

Table 5: İMM - Distribution of personnel according to employment type (%) (Source: İMM, Annual Report of Activities, 2009)

2006 2011 Civil servants 60.9 56.4 Workers 36 40.2 Personnel under contract 3.1 3.4

Table 6: Beşiktaş Municipality – Distribution of personnel according to employment type (%) [calculated from, for 2006, Beşiktaş Municipality Strategic Plan (2023 term) and for 2011, statistics available at http://www.besiktas.bel.tr/t/15/sub.jsp?p=9122 ]

2005 2006 2007 2008 2009 2010 2011 Civil servants 51 48 46.2 50 50.1 51 51.3 Workers 49 48 49.3 45.2 44.6 41.6 38.8 Personnel under contract 0 4 4.5 4.8 5.3 7.4 9.9

Table 7: Beyoğlu Municipality – Distribution of personnel according to employment type (%) (calculated from Beyoğlu Municipality, Annual Report of Activities, 2011)

2006 2007 2008 2009* 2010 2011 Civil servants 56.4 52.7 54 61.2 62 66.7 Workers 41 40.3 38 34.8 31.1 22.4 Personnel under contract 2.6 7 8 4 6.9 10.9

Table 8: Fatih Municipality - Distribution of personnel according to employment type (%) (calculated from Fatih Municipality, Annual Report of Activities, various years) *Eminönü municipality was merged with Fatih municipality.

2006 2007 2008 2009 2010 2011 2012 8 10 10 11 14 15 15

Table 9: Kadıköy Municipality - % of personnel under contract (obtained directly from the municipality)

2003 2008 2010 2011 Civil servants 56 59 59.2 59 Workers 44 41 37.2 37 Personnel under contract - - 3.6 4

Table 10: Sarıyer Municipality - Distribution of personnel according to employment type (%) [calculated from, for 2003-2008, Sarıyer Municipality Strategic Plan (2010-2014) and for 2010 and 2011, Annual Report of Activities for these years]

24

Given the numbers of tenders, contracts, and private contractors involved in diverse

areas of municipal service, accurate and reliable statistics of the personnel hired by private

contractors are among the most difficult to systematically gather. However, in the absence of a

significant ideological variation in the patterns and frequencies of contracting out of services, as

demonstrated above, one does not expect such variation in the number of personnel hired by the

private companies delivering municipal services by contract. As a demonstrative example, in one

of the RPP municipalities, that is, Beşiktaş, in 2006, 521 additional personnel (43 % 1205 total

personnel providing municipal services) were hired by private contractors providing local

cleaning, parks and gardens, transportation, and security services.25

Hiring of temporary workers by municipalities in Turkey has been underlined as a

“problem” by various analysts since the 1990s.26 Regarding the employment of such workers by

the selected municipalities in İstanbul, the scarce data provided in their annual reports of

activities hint at practices contrary to the expectations of the ideology hypothesis. To exemplify,

the share of temporary workers in the total number of İMM employees has been only 0.3 % (35

out of 13.789) at the end of 2009.27 At the end of 2006, temporary workers comprised 7 % of the

total personnel at the conservative Fatih municipality.28 During the same year, at the social

democrat Beşiktaş municipality, 25 % (170 out of 684) of the total personnel hired directly by

the municipality were temporary workers.29 In Kadıköy, another social democrat municipality,

according to the municipal annual report of activities, temporary workers constituted 12.7 %

(189 out of 1493) of the total municipal employees in 2007. In sum, despite the insufficiency of

related data, the data that is available does not support the ideology hypothesis which expects

social democrat parties to be more sensitive and responsive to labor rights.

Conclusion

In the case of Turkey, the laws and regulations, put into effect since 1984, have

introduced significant incentives and various instruments by which the public can be privatized

at the local level. In order to impose fiscal discipline, market/private sector values, such as

competition, efficiency, and managerialism have been institutionalized. When evaluated based

25 Beşiktaş Municipality Strategic Plan (2023 term) 26 Deniz Sayın, “Belediyelerde Geçici İşçi Sorunu”, Çağdaş Yerel Yönetimler, 2, 1, 1993, pp. 47-54 27 İMM, Annual Report of Activities, 2009 28 Fatih Municipality, Annual Report of Activities, 2006 29 Beşiktaş Municipality Strategic Plan (2023 term)

25

on the conceptualization and indicators of the privatization of the public in the delivery of

municipal services presented at the outset, the findings from the selected İstanbul municipalities

demonstrate the trend toward the privatization of the public in the delivery of municipal services,

with the exception of water and sewage services.

In İstanbul privatization has been carried out by different means. First, one of the ways,

especially at the metropolitan municipality level, has been municipal corporatization in diverse

areas of service. As revealed above, the majority of municipal corporations affiliated with İMM

were founded and two were privatized under the governance of conservative political parties

whereas the couple of municipal corporations affiliated with two district municipalities were

established under social democrat mayors. Second, contracting out of services and employment

as well as contractual employment by municipalities and hiring of temporary workers have been

the most prevalent privatization instruments adopted by both conservative and social democrat

local governments.

In summary, the evidence presented, with the exception of overtime municipal

corporatization at the metropolitan level, is not supportive of the hypothesis that left-wing local

governments will be more reluctant to privatize local services, while right-wing local

governments will be more inclined to do so. The argument that local governments are guided by

pragmatic rather than ideological motivations holds.30 Yet, this does not mean there is no social

democrat critique of and resistance to the privatization of the public at the national level. For

instance, in 2011, the Chairperson of the social democrat RPP, Kemal Kılıçdaroğlu made

widespread contracting out practices of municipalities governed by his party not only in İstanbul,

but across the country an issue and promised full-time appointment of all those working under

contract or temporarily in the delivery of municipal services. Whether and to what extent this can

be realistically achieved under fiscal constraints are open-ended questions.

Finally, it should be emphasized that in the case of Turkey, domestic and local factors

and actors have not been the only ones pushing towards the privatization of the public at various

levels and in different forms. While they have been outside the scope of this study, it should be

noted that external pressures by international actors, such as the European Union, the IMF, and

the World Bank, have also played a role in the restructuring of the public sector and local

governments in Turkey.

30 Bel and Fageda, op cit.