Your distributing goods in the form of benefits says, "I know what you need better than you do."

I have been reviewing a survey conducted in February. Inequality in income distribution is among the top three challenges for Turkey. When you ask people what problems the new constitution must solve, they respond, "economic and social rights and thus the improvement of welfare." These are always among the top three answers. This is the agenda of the people in Turkey. On the eve of the elections, the Republican People's Party (CHP) has brought a plan for family insurance onto the agenda. I think this is a perfect move. The family insurance scheme is a good idea in the current environment. Moreover, the CHP has designed a mechanism that is more market-friendly than the current social assistance system. Let me tell you why I think the family insurance system is a better idea compared to the current social assistance system in Turkey.

A number of social assistance mechanisms are in effect in Turkey. All administrations have tried to do something about social assistance both on the central and the local levels. This is because there exists a need for social assistance. I call this "doing something" because each administration makes disjointed individual efforts. This is the reality in the ninth year of the ruling AKP. However, in all of the former social security reform plans, the uniformization of social assistance schemes were involved in emergency action plans. The CHP now embraces that sufficiently debated and matured idea, which is good. This is the first point.

The second point is that the cash benefit system introduced by the CHP is completely different from the current system based on in-kind benefits. This is an old question from first year economics textbooks: "Which one ensures a more efficient allocation of resources: cash benefits or in-kind benefits?" Of course, it is better to provide cash benefits. Since everyone knows what they need the best, the beneficiaries can go and purchase whatever they like. Your distributing goods in the form of benefits says, "I know what you need better than you do." This is sort of like the "savior soldiers" mentality. Only in this picture, the savior soldier is the AKP. The mechanism proposed by the CHP is much more modern. It enables a more efficient allocation of resources. This is the second point.

The third point is that if you do not provide cash benefits, this means that you do not allow people to allocate their resources according to their own preferences. How would the resources be allocated, then? They would be allocated in line with the preferences of the provider. The willpower of the bureaucrat emerges. What else? The "My civil servants know what to do" way of thinking enters the picture, according to which which the "this guy supports our party, let's purchase washing machines from his firm" mentality prevails. Then what happens? Then we end up with villages with washing machines but without electricity. If you provide goods instead of cash, the resource allocation process will be determined not by those in need, but those with authority. This is not a good thing.

Consequently, the CHP's family insurance mechanism is highly functional. This is what Turkey needs. Turkey still does not have a consistent social security and assistance system. This gap must be filled immediately after the elections by the winning party. Nevertheless, one problem remains for the CHP. The points I have highlighted above cannot be distinguished easily in the brochure issued by the CHP titled "Towards a Strong Social State." The brochure, which is supposed to be understood by the public, is written in the language of a dissertation. The brochure does not even have page numbers to guide the reader.

The brochure must be edited immediately by a text writer.

Under these circumstances, the conclusion goes as follows: the CHP's plan is more functional than that of the AKP. Then, why does the CHP fail to take advantage of this?

This commentary was published in Radikal daily on 04.03.2011