# **Table 1. Prioritization of Constraints in Growth, Inclusive Growth & Gender-Enhanced Growth Diagnostics (rankings are based on a scale from 1 to 4)**

|**List of constraints**||**Scores ind**<br>|**icating rele**<br>|**vance to**<br>|**:**<br>|
|---|---|---|---|---|---|
||**Growth**<br>**(2)**|**Inclusion**<br>**(3)**|**Growth +**<br>**Inclusion**<br>**(4)**|**Gender**<br>**(5)**|**Growth +**<br>**Gender**<br>**(6)**|
|**Solid Foundations**||||||
|Lowqualityof regulatory& accountabilityinstitutions|4|4|**8**|2|6|
|Geopolitical tensions affectingEast and Southeast|4|4|**8**|2|6|
|Underdeveloped financial markets|4|4|**8**|4|**8**|
|Macro-fiscal risks|3|3|6|2|5|
|**Productive Employment**||||||
|Low educational achievement|4|4|**8**|3|**7**|
|Low female labor forceparticipation|4|4|**8**|4|**8**|
|Wide regional differences and lack of convergence|3|4|7|3|6|
|**Dynamic Firms**||||||
|Lowperformance in technologyabsorption and innovation|4|2|6|4|**8**|
|Weak corporategovernance|4|2|6|2|6|
|Weak competitionpolicyand its enforcement|4|2|6|2|6|
|Beingstuck in small,mixed croppingagriculture|3|4|7|4|**7**|
|**Public Assets and Resources**||||||
|Congested|4|3|7|2|6|
|Decliningavailabilityof water|3|3|6|3|6|
|Energyconsumptions closelylinked with GDPgrowth|2|3|5|2|5|
|Inefficient land management|3|3|6|3|6|

Source: Adapted from World Bank (2016). Note: Scores in columns (2) and (3) are obtained from World Bank (2016) based on staff estimates and Turkey experts’ survey. The scores in columns (4) equal the sum of the scores in columns (2) and (3). The scores in column (5) are ours and the ones in column (6) equal the sum of the scores in columns (2) and (5).

The Turkish case is illustrated in Figure 1. As suggested by global data in the WEF on gender gaps, Turkey has made progress in closing the education gender gap (the female-male gaps in enrollment in secondary education and tertiary education are 99% and 87%,<sup>17</sup> respectively), but Turkey still has large gender gaps in labor force participation, formal employment and entrepreneurship. The female-male gender participation gap, assessed at 46.6% in 2018 according to WEF data, indicates a significant gender-related policy distortion τG that limits female LFP. The World Bank SCD identifies this distortion as a binding constraint to growth in Turkey, giving it a score of 4 (see column 2 of Table 1), which suggests that this constraint is associated with a large λG and G≡Y. Therefore, lifting the distortions responsible for the gender participation gap is expected to produce a large positive direct welfare gain. In addition, failure to close this gap signals an inefficient policy stance<sup>18</sup> that may give rise to large negative interaction effects when policies

> 17 Source: WEF 2018, http://reports.weforum.org/global-gender-gap-report-2018/data-explorer/#economy=TUR. 18 Turkish women fare badly in terms of other workforce indicators. Compared to men, they are 43% more likely to be unemployed, twice as likely to be employed part time and three times more likely to be employed in unpaid work. Partly because of this gender workforce participation gap, but also due to lack of political participation, Turkey ranks 130<sup>th</sup> of 143 countries on the WEF’s Global Gender Gaps Report (2018).

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