The Myth of Meritocracy: Does Meritocracy Promote Economic Growth? Evidence from Turkey

Abstract

This paper makes a contribution to the literature in a number of important ways: First, this paper offers a two-period OLG model of endogenous growth that incorporates both meritocracy and social capital: in our theoretical framework, meritocracy can promote social capital. Second, this paper provides a measure of the meritocracy degree to determine the extent to which there is an incidence of nepotism in the society this is because meritocracy is the opposite of nepotism, that is, the lower meritocracy degree, the higher nepotism is or the other way around. Third, this is the first study that has provided a solid evidence base for Turkey in linking the notion of meritocracy with social capital and explaining its implications for long-run growth. To this end, we calibrate our theoretical model based on a combination of theoretical restrictions and empirical observations. We conduct several policy experiments. We first consider an increase in the share of public spending on social capital building activities and infrastructure investment under two scenarios: each increase is financed by a cut in either other items or education. We also run a policy experiment associated with a decrease in the share of non-meritocratic political elites. In general, the findings of our policy experiments show that a higher meritocracy degree can promote social capital and therefore long-run growth. However, when an increase in the share of government spending on either social capital building activities or infrastructure investment is financed by a cut in education, in the benchmark case, the net impacts on long-run growth turn out to be negative or very small due to the trade-off effect because it seems that the cut in the share of government spending on education is detrimental to growth. Show more