kayaalp, torn in translation

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Torn in translation: An ethnographic study of regulatory decision-making in Turkey Ebru Kayaalp Faculty of Communication, Istanbul Sehir University, Istanbul, Turkey Abstract There is much literature on the diffusion and translation of regulatory agencies from the perspec- tive of formal political models. Ethnographic research of regulation process is, however, much less common. This is even more evident with regards to the study of regulatory agencies established outside the “West.” This article analyzes the translation process of the Turkish tobacco regulatory agency, which was established in 2002, under commitments made to the International Monetary Fund and the World Bank. Based on an ethnographic analysis of two controversial cases, the study shows that tobacco regulation was being shaped and pursued in an environment of ambivalence and uncertainty. The study concludes that the decision-making process of the agency is context- specific and constructed within the perpetual struggles and interactions among the actors involved in this process. Keywords: conflict, diffusion, regulation, regulatory agency, translation, Turkey. 1. Introduction Originating in the United States in the financial sector, regulatory agencies have spread to Europe and then to the rest of the world. Since the mid-1980s, the number of regulatory agencies has sharply increased (Jordana et al. 2011). The mushrooming of agencies around the world is accompanied by a rising number of studies analyzing agency behav- ior from the perspective of formal political models. Ethnographic research of regulatory agencies is, however, much less common. This is more evident with regards to the study of regulatory agencies established outside the “West.” Based upon an ethnographic account of a regulatory agency in Turkey, this article aims to fill this gap. I follow and analyze the process of institutional translation of the Turkish tobacco regulatory agency, which was established in 2002, under commitments made to the International Monetary Fund (IMF) and the World Bank. Specifically, I explore the practices of the tobacco agency on the ground. How are the policies of the tobacco agency being made and implemented? Which actors are involved in the decision-making process? What are the underlying principles, political motives, and legal framework behind the policies that regulate the tobacco sector? Correspondence: Ebru Kayaalp, Faculty of Communication, Istanbul Sehir University, Altunizade Mahallesi, Kusbakisi Cad. No:27, 34662 Uskudar, Istanbul, Turkey. Email: ebrukayaalp@ sehir.edu.tr Accepted for publication 25 January 2012. Regulation & Governance (2012) doi:10.1111/j.1748-5991.2012.01135.x © 2012 Blackwell Publishing Asia Pty Ltd

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  • Torn in translation: An ethnographic studyof regulatory decision-making in Turkey

    Ebru KayaalpFaculty of Communication, Istanbul Sehir University, Istanbul, Turkey

    AbstractThere is much literature on the diffusion and translation of regulatory agencies from the perspec-

    tive of formal political models. Ethnographic research of regulation process is, however, much less

    common. This is even more evident with regards to the study of regulatory agencies established

    outside the West. This article analyzes the translation process of the Turkish tobacco regulatory

    agency, which was established in 2002, under commitments made to the International Monetary

    Fund and the World Bank. Based on an ethnographic analysis of two controversial cases, the study

    shows that tobacco regulation was being shaped and pursued in an environment of ambivalence

    and uncertainty. The study concludes that the decision-making process of the agency is context-

    specific and constructed within the perpetual struggles and interactions among the actors involved

    in this process.

    Keywords: conflict, diffusion, regulation, regulatory agency, translation, Turkey.

    1. Introduction

    Originating in the United States in the financial sector, regulatory agencies have spread toEurope and then to the rest of the world. Since the mid-1980s, the number of regulatoryagencies has sharply increased (Jordana et al. 2011). The mushrooming of agenciesaround the world is accompanied by a rising number of studies analyzing agency behav-ior from the perspective of formal political models. Ethnographic research of regulatoryagencies is, however, much less common. This is more evident with regards to the studyof regulatory agencies established outside the West. Based upon an ethnographicaccount of a regulatory agency in Turkey, this article aims to fill this gap. I follow andanalyze the process of institutional translation of the Turkish tobacco regulatory agency,which was established in 2002, under commitments made to the International MonetaryFund (IMF) and the World Bank. Specifically, I explore the practices of the tobaccoagency on the ground. How are the policies of the tobacco agency being made andimplemented? Which actors are involved in the decision-making process? What are theunderlying principles, political motives, and legal framework behind the policies thatregulate the tobacco sector?

    Correspondence: Ebru Kayaalp, Faculty of Communication, Istanbul Sehir University,Altunizade Mahallesi, Kusbakisi Cad. No:27, 34662 Uskudar, Istanbul, Turkey. Email: [email protected]

    Accepted for publication 25 January 2012.

    Regulation & Governance (2012) doi:10.1111/j.1748-5991.2012.01135.x

    2012 Blackwell Publishing Asia Pty Ltd

  • In Turkey, the proliferation of regulatory agencies has gained a considerable pace inthe 1990s and 2000s (Zenginobuz 2008, p. 476). Especially after the February 2001 crisis,the most severe economic downturn in the history of Turkey, a number of regulatoryagencies were established in a very short period of time. The financial crisis generated anemergency situation in which a series of sweeping neoliberal policies were implementedto prop up the collapsed economy. To receive the necessary loans from the internationalfinancial institutions, the Turkish government hastily enacted a number of laws. In lessthan a year, the Turkish parliament passed 19 important structural reform laws orregulations, the most important of which included a telecommunications law, a law onthe sugar industry, a public procurement law, and a tobacco law, all requiring the estab-lishment of regulatory agencies for each sector (Dervis 2005, p. 67).

    In line with commitments made to the IMF and the World Bank, on 3 January 2002,the Turkish Parliament ratified Tobacco Law 4733, which brought about four majorchanges: the elimination of bulk tobacco purchases by the state; privatization of the statetobacco monopoly; substitution of contract farming; and establishment of the tobaccoregulatory agency, which is the subject of this paper.1

    The tobacco regulatory agency was established as an independent body with financialand administrative autonomy. The agencys president and board members are chosen bythe Council of Ministers from among candidates proposed by the Ministries of Finance,Health, and Agriculture, as well as the treasury, the external trade bureau, chambers ofagriculture, and the tobacco monopoly.2 Before the 2002 legislation, the tobaccomonopoly not only regulated the production of tobacco, and bought most of it, but it wasalso a major cigarette manufacturer. The monopoly used to intervene in the market bysetting the maximum price for the best quality tobacco and making support purchases. Itused to hold the authority to designate the lands available for cultivation; to registertobacco farmers; and to regulate the marketing and leaf processing in the country. Soonafter the laws enactment, the state started the privatization process of the monopoly.After the first two unsuccessful attempts of privatization, in June 2008, British AmericanTobacco won the tender and the sale was completed. The agency, however, took over thetobacco monopolys previous administrative role in the market, such as providing andenforcing regulations, and monitoring and surveillance of tobacco production and sales,immediately after the enactment of the tobacco law in 2002, long before the privatization.In the meantime, the monopoly was left as a state-owned company.

    In contrast to the monopoly, the agency did not hold the responsibility for purchasingthe yield. It was neither the buyer of tobacco nor the manufacturer of cigarettes, butdesigned as an independent agency to regulate the sector. This sort of regulation aimed todiminish the intervention of the state and establish the competitive market economyconditions in the tobacco sector.

    The translation process of the new tobacco regulatory structure that was imposed byinternational financial institutions is the focal point of this article. The decision-makingprocess of the agency was found to be context-specific and constructed within theperpetual struggles and interactions among the actors involved in this process. Based onan ethnographic analysis of two controversial regulatory cases in the Turkish tobaccosector, the study demonstrates that tobacco regulation was being shaped and pursued inan environment of ambivalence and uncertainty. It concludes that the agency has beenimplementing an improvised decision-making process, hinging on expectations, predic-tions, and speculations, rather than following ready-made politics.

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  • By focusing on the gap between regulatory expectations and performance (Huising& Silbey 2011, p. 15), the article investigates how the imported regulatory model istransformed, as it has traveled into a new setting. There are a number of ethnographicworks (Escobar 1994; Dunn 2004; Schwegler 2004; Anders 2005; Elyachar 2005; Ferguson2006; Li 2007), which examine the transfer and implementation of global policies byinternational financial institutions in developing countries. In line with these studies, Ialso challenge the argument that a top-to-bottom global diffusion process turns localentities into replicas of the original. Following Djelic and Sahlin-Andersson (2006), Iargue that, in a world where boundaries are in flux, a multiplicity of actors, such as states,international organizations, expert groups, professional associations, and business cor-porations, are involved in the regulation process. The involvement and interaction of avariety of actors, and their negotiations, conflicts, and resistance with each other, turn theregulation into a more complicated and multidimensional process, which cannot besimply comprehended within the framework of predetermined duties and responsibili-ties of the agency.

    I carried out a multi-sited ethnography (Marcus 1998) for more than two years inTurkey (September 2005 to March 2008). I spent a year at the Tobacco Experts Associa-tion in Izmir, which has been actively working to promote the interests of the tobaccosector since 1948. Here, I had the opportunity to interview tobacco experts working at thetobacco monopoly, the tobacco regulatory agency, and multinational cigarette compa-nies. I also traveled with the experts to numerous villages in eastern and western Turkey,attended tobacco-related parliamentary meetings in Ankara, and interviewed high-ranking government bureaucrats, as well as the representatives of multinational cigarettecompanies. These interviews allowed me to comprehend and single out the differentperspectives held by various actors in the tobacco sector. I also collected data fromnewspapers and journals discussing the issues about the Turkish tobacco market.

    In this research three major actors stand out: the tobacco monopoly and the Ministryof Finance (the government); the emerging tobacco regulatory agency (the regulatoryagency); and the multinational cigarette companies (private sector). The triangular rela-tions among these three actors have become the focal point of this study in the sense thatthey have continuously defined and transformed the responsibilities for tobacco regula-tion in Turkey. The regulation process has evolved with struggles and conflicts throughthe formation of coalitions and counter-movements among these actors. I argue that thecomplex functioning of the regulatory process can be best understood by examinationduring times of conflict. Tracking conflicts is one of the established methods used in theanthropology of law (Marcus 1998) and the analysis of regulatory controversies is now anestablished genre in science studies (Turner 2001). I apply the same approach to explorethe functioning of the regulatory agency through two controversies in the followingpages. The two cases, the purchase of hard-box cigarette packing machines and theadjustment of cigarette taxes, are specific events that are peculiar to Turkey and might notbe generalized to regulatory agencies elsewhere. These examples, however, aim to provideethnographic insights demonstrating how agencies transform and travel into new set-tings with an analysis of differences between the global policy and their generated prac-tice on the ground. While in the first case the conflict was basically taking place betweenthe agency and the monopoly, the second example discusses the controversy between theagency and the multinational cigarette companies. The agencys double controversy withboth the state (the monopoly) and the market actors (the multinationals) simply illus-

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  • trates the absence of predetermined agenda of the agency, working for enhancing thecapacity of either the public or the private interest.

    The article is structured as follows. I begin with a discussion of regulatory agencies ingeneral, followed by a short description of the Turkish tobacco agency. In the twosubsections, I provide an analysis of two controversies concerning the functioning of thetobacco regulatory agency. The last section concludes.

    2. Regulatory agencies

    With the powers given to regulatory agencies, the exercise of control, surveillance, andruling over people spatially and temporally has become possible. Like Latours immutablemobiles (1987), which can be translated into a fixed form that is combinable and com-parable with other inscriptions, and can be carried from their original contexts to othersettings, regulatory agencies travel across space and time and are combined with otherkinds of institutional applications.

    Drawing on Latours work, Miller and Rose coined the concept governing at adistance, by which, it becomes possible to link calculations at one place with action atanother, not through the direct imposition of a form of conduct by force, but through adelicate affiliation of a loose assemblage of agents and agencies into a functioningnetwork (Miller & Rose 1990, pp. 910). A network of flexible linkages that is establishedamong those who are separated spatially and temporally, and between events in spheresthat remain formally distinct and autonomous, enables those in power to govern at adistance. Regulatory agencies can be seen as the knots in these networks combining adiverse range of actors varying from government institutions and local bureaucrats tointernational financial institutions and multinational companies. They travel around theworld as standardized institutions, which govern the economic and social life in the placesthey settle. Relying crucially on professionals and experts, they attain power with theirclaims of neutrality and authority, as well as the ability to remove themselves from thedisputed terrain of politics.

    The properties of the regulatory state have been universalized through diffusion(Majone 1994, 1997; Levi-Faur 2005), but regulation after diffusion remains a complexprocess requiring further examination. Despite the global pervasiveness of regulatorymodels, it is not possible to talk about the creation of global institutional homogeneity.Global standards may lead to the creation of institutions sharing common featuresbeyond national borders (DiMaggio & Powell 1983; Strang & Meyer 1993; Meyer et al.1997), but not necessarily to the emergence of identical regulatory processes and insti-tutions at the national level. After they are imported to the national setting, regulatoryagencies may be conflicted with the existing institutional structure as well as internationalinstitutions (Sonmez 2011), and they may perform in a process of complexification ofpolicy making and thus politicisation (Lodge 2008, p. 294). Political interventions at thelocal level might impair the independence of the regulatory agencies (Ozel 2012) andinfluence how the models are interpreted and implemented in that specific context.

    When a global model is adopted, it actually undergoes a process of translation, andgains different meanings from those inherent in the original model.3 By translation,Callon and Latour mean all the negotiations, intrigues, calculations, acts of persuasionand violence, thanks to which an actor or force takes, or causes to be conferred on itself,authority to speak or act on behalf of another actor or force (Callon & Latour 1981,

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  • p. 279). Translation means the transformation of models as they move into new settings.But what is equally important is the dynamic process of translation itself, which producessomething new, regardless of preexisting choices of individuals or the dominating socialstructure. Callon and Latour challenge the definite certainty in the translation process bydismissing the preexisting categories and their domination in social and political realms.The process of translation constitutes a fluid network, in which the final policy is theoutcome of interrelationships among the actors involved in the process. The coherenceattributed to a successful project is never a priori (Mosse 2004, p. 665) but it is createdin retrospect, as the outcome of the translation process, which is essentially composed ofdissent and conflict.

    When regulatory agencies first appeared in Turkey, many studies (Gunaydn 2000;Islamoglu 2002; Sezen 2003, 2007; Sonmez 2004; Bayramoglu 2005) stated that theseinstitutions could not lie outside the domain of politics. The characteristics attributed tothe regulatory agencies, such as autonomy, transparency, or objectivity, are all question-able. Regulatory agencies, or any institution, cannot work in an apolitical setting devoidof power relations. The argument that these agencies are laden with power relations hasengendered a heated discussion in Turkey as to whose interests these bodies are serving:public welfare or private interests. The debate in fact echoes the argument betweenopponents and proponents of private interest and public interest views of regulation(Morgan & Yeung 2007).

    From the public interest perspective, regulators work for the achievement of collectivegoals with the aim of promoting the community welfare against private interests ofcertain groups. The private interest perspective, by contrast, is skeptical of public inter-estedness of regulators, and recognizes that regulation often benefits particular groups insociety (Morgan & Yeung 2007, p. 17). The private interest approach is best known withinthe theory of regulatory capture (Stigler 1971), that is, a situation when regulators whoare responsible for promoting collective welfare actually work for the promotion of theinterests of the people they regulate.

    Both the public and the private interest approaches have shortcomings. While theprivate interest view is criticized for its absolutism in equating regulation with capture,the public interest perspective is criticized for its nave stand to regard regulators asclear-cut agents of the public interest (Morgan & Yeung 2007). The most significantcriticism of both theories, at least for the purposes of this paper, derives not only from thestraightforward separation between public and private actors, but also the deterministicapproach that these actors, with their predetermined agendas, generate the desired poli-cies. As will be shown in the case of the Turkish tobacco sector, the regulatory practice wasproduced in an ambivalent atmosphere and emerged out of the temporal negotiations,contestations, and resistance among different actors and actions in real time.

    From its foundation, the functioning of the tobacco regulatory agency was con-structed around ambivalence. First, it was somewhat unusual for a regulatory agency todeal with one single agricultural product, especially while other regulatory bodies weredevoted to major sectors, such as banking and energy. When the tobacco agency wasestablished, it was stated that, like the sugar regulatory agency, it would operate tempo-rarily until the market was fixed. The word temporary hanging in the air continuouslyovershadowed the functioning of the agency. Though the sugar agency was closed,4 thetime for the tobacco regulatory agency to meet its demise has not yet arrived. Second, thenew law was pretty short with 12 articles compared to its predecessor Law 1177 which

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  • provided a very detailed explanation about the legal procedures of tobacco productionand exchange in 122 articles.5 What is interesting and novel about Law 4733 is itsreference to regulations and by-laws instead of providing detailed information. In otherwords, the law seems different than the conventional Turkish laws regarding its format,being like a manual, rather than an explanatory legal text. The short tobacco law has leftthe members of the regulatory board with an array of ambiguities. The agency wasestablished in line with its commitments to international financial institutions, butnobody seemed to know what specific functions it would fulfill. Free market economy,regulation, and non-state intervention, have remained abstract empty conceptsobscuring particular policies that the agency had attempted to undertake.

    Under the pressure of massive uncertainty and ambiguity, the decision-makingprocess was based upon the assessments of other actors in the tobacco sector. Faced withthis problem, the agency had no choice but to solve controversies by trial and error. Inbrief, its performance was grounded in practices of different actors both from public andprivate sectors, as will be shown in the following two cases.

    2.1. Conflict I: Machines and reportsThe first case pertains to the monopolys purchase of hard-box packing machines for itsbiggest factory in Tokat to gain a stronger position vis--vis the state-of-the-art technol-ogy of multinational cigarette manufacturers. The conflict, which started between thetobacco monopoly and the regulatory agency after the involvement of the Ministry ofFinance, demonstrates how the agency made its decisions about the sector in an envi-ronment of uncertainty and ambivalence. The fault lines between the state offices, theMinistry of Finance, and the monopoly, regarding the purchase of hard-box machines,illustrate not only the non-monolithic structure of the state, but also how their struggleover the tobacco sector shaped the entire regulation process.

    In the 1990s, the tobacco monopoly held a well-established position in the Turkishand world markets as the fifth largest cigarette producer (TEKEL 1999). Having been theonly tobacco company in the country for years, the monopoly did not develop any marketstrategies. With investments of multinational cigarette manufacturers in Turkey, thetobacco market became more competitive and necessitated the introduction of technicalnovelties. With the introduction of competition, the monopoly administration felt theneed to modernize the company. The first modification was to update the current tech-nology, which dated back to the 1970s.

    Turkish smokers had developed a preference for hard-box cigarettes after the intro-duction of American blend cigarettes to the local market in 1986.6 Hard-box cigarettes,along with their functionality of protecting the shape of the cigarettes, became veryfashionable among smokers. To compete with the multinationals, the monopoly agreedto lease eight hard-box packing machines from Spain in June 2004, which would have cost13.8 million.7 The new arrangement was ready to proceed until a deputy8 brought upquestions about the purchase of hard-box packing machines in parliament. The deputyquestioned the legality of the hard-box machine agreement with an interpellation sub-mitted to the Minister of Finance, whose son was implicated in the sale.9 Regarding theage of the machines, the minister replied:

    Either bought or leased machines must be new and unused as a requirement oflegislation in effect. This condition is explicitly cited in the specifications and thecontracts. The exporting company will hold the entire responsibility and be sub-

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  • jected to serious and significant sanctions if these conditions are breached. Theinspection of the subscribed conditions during the import process is done by theTobacco, Tobacco Products and Alcoholic Beverages Market Regulatory Agency.10

    (underling in original)

    The minister placed the tobacco regulatory agency in charge. After being interpel-lated11 by the Minister, the agency sent its experts to the factory. Upon the expertsinspection, the regulatory board asserted that the conditions of the machines did notcomply with the tobacco law, which required that the purchased equipment of thetobacco factories must be new, and these machines were old and, as a result, had to bedismantled and returned to the exporting country within the following 60 days. Themonopoly officials were shocked by the report and stated that the machines were brandnew. Besides, even if they had not been new, it would not have created a problem since thereferred-to law was applicable only for prospective cigarette companies intending toestablish new factories in the country. The law was ambiguous as to whether or notexisting cigarette companies, including the monopoly, could invest in old machinery.12

    At first, the two conflicting sides (the monopoly and the regulatory agency) attemptedto prove and support their judgment by certifying the condition of the machines. Threeexpert reports on the machines were requested: the first report, written by the engineersworking for the regulatory agency, stated that the machines were used; the second report,requested by the monopoly from the engineers of the Istanbul Chamber of Industry,affirmed that the machines were not used; and the third report, requested by the customsoffice from Istanbul Technical University, asserted that the machines might have beenmanufactured before the indicated date, but were not used.13

    The political struggle between the two institutions was the basic reason behind thetechnical debates about the old/new machines. The machines became a hub for both thetechnical, as well as the political debates. The political aspect of the incident was therefrom the beginning, but turned into a technical matter through which the two institu-tions could argue their claims. The monopoly applied to the courts for the suspension ofexecution, that is, returning the machines to Spain, using the second report as evidencethat they were new. Their request was rejected, prompting them to apply to a superiorcourt. In the end, the continuing legal proceedings in the courts were taken to parliament.In order to keep the machines, the majority party, the Justice and Development Party,intended to add an article to the tobacco law stating that only newly established cigarettefactories were required to buy new equipment. However, already alarmed by accusationsof corruption in the press, as well as by the criticisms of the opposition parties, it had todrop the proposal for the new regulation.

    The legal process was still ongoing as clarification of the case took time in the legalrealm due to ambiguities in the law, the interpretation of the law, the contract, and theinterpretation of the contract. Thus, the alternative way to expose the truth was byinvoking the technical realm, where the evidence would supposedly be easily found. Thisis reiterated by Latours concept that when controversies flare up the literature becomestechnical:

    When we approach the places where facts and machines are made, we get into themidst of controversies. The closer we are, the more controversial they become.When we go from daily life to scientific activity, from the man in the street to themen in the laboratory, from politics to expert opinion, we do not go from noise to

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  • quiet, from passion to reason, from heat to cold. We go from controversies to fiercercontroversies. (Latour 1987, p. 30)

    This is exactly what happened in the machine conflict. The contenders in the disputeinvoked technical reports but they did not yield what was expected. Different experts tookpictures of the machines, reports were written, and the different data were circulated, butthe goal of exposing the facts was not achieved. The evidence in the reports and picturesof the machines was as ambiguous as the discussions, and could not transform what wasopaque and unclear into a plain, transparent, and absolute fact.

    In the end, the machines were shipped back to Spain as several officials of the monopolywere called before the courts for questioning. The high-ranking officials of the monopolyas well as the ruling party vehemently criticized the verdict on the grounds that it wouldleave the monopoly behind its competitors and open the way for the cigarette multina-tionals to dominate the market. The general director of the monopoly, who signed theagreement to buy the machines, blamed the cigarette multinationals for playing a majorrole in the verdict: Philip Morris and JTI [Japan Tobacco International] are playing a biggame here, and trying to destroy [the monopoly], he reported to the newspapers (Bayer2005b). The monopoly included the multinational cigarette companies in the picture tosupport its case against the agency. Having already been skeptical about the establishmentof a regulatory agency under commitments made to the IMF and the World Bank, thebureaucrats of the monopoly had already been alarmed with the idea that the agency wouldpursue policies in favor of multinationals. For them, the hard-box packing machine casesimply showed that the interests of multinationals captured the regulatory agency.

    The monopoly, by arguing that the agency was not neutral in regulating the sector,assumed that the global institution was imported into Turkey with the undisclosed goalof enhancing the capacity of the multinational companies. Ironically, the monopoly alsodismissed the so-called depoliticized nature of the agency, when it stipulated an agencymodel that must be working in favor of the state. The agency, as an institution of theTurkish state, should have been on the side of the monopoly, and promoted the publicinterest. The monopoly officials often expressed the view that corruption might havetaken place in the machine case, but the involvement of the agency in the conflict waswrong since what the monopoly did, corrupt or not, had a nationalistic purpose, with theaim of strengthening the position of the tobacco monopoly vis--vis the multinationals.

    The critical discourse of the monopoly presumes the existence of a predeterminedregulatory policy working for the promotion of the interests of a certain group. However,as the case illustrates, the agency did not have any prefixed policies about the purchase ofmachines. The regulation process first started with the interrogation of the Ministry ofFinance, followed by the creation of several expertise reports upon request, and contin-ued with the tobacco monopolys resistance to the decision to return the machines. Theregulatory agency in the end made a conclusive decision produced within the complexinterrelations of actors in the real time of the controversy.

    2.2. Conflict II: Tax and blendsThe second crisis broke out six months after the machine scandal. This time thecontroversy was between the regulatory agency and multinational cigarette manufactur-ers. While in the first case, the agency was in conflict with the monopoly, in the secondone, it was involved in a controversy with the multinational cigarette companies about thedetermination of cigarette taxes. The case, which started with the inquiry of the Ministry

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  • of Finance and continued with the accusation of the agency (this time) for siding with themonopoly, demonstrates that the agency did not hold a predetermined agenda favoringeither public or private interest, and its duties and responsibilities have kept changingaccording to the maneuvers of other actors in the sector.

    In three years (20022005), the taxes on cigarettes changed seven times (DPT 2006,pp. 7273), and one of them seriously transformed the market structure. The cigarettemanufacturers starkly criticized the irregular modifications in taxation policy. Theyargued that the arbitrary decisions of politicians were based on the interests at the time,leading to an unpredictable and unstable market and thus blocking the way for invest-ments in the country. However, despite their harsh criticisms, the multinationals copedwith and even took advantage of the new modifications.

    Frequent policy changes in cigarette taxation resulted from the changing marketstrategies of cigarette multinationals and the Ministry of Finances responses to thesechanges. The British American Tobacco (BAT) company reduced the sale prices of twomedium-priced cigarettes by about 20 percent in mid-2004, requiring the Ministry ofFinance to modify its taxation policy. As a relatively new multinational cigarette companyin Turkey, BAT implemented an aggressive marketing policy to attain a greater share in themarket, along with looking for ways to pay less tax, which had climbed up to 71 percent inrecent years (see Yurekli et al. 2010, p. 32). Other cigarette companies had to reduce theirprices to compete with BAT, which led to a radical drop in the total amount of taxes paidto the government. Tax policies on cigarettes are set through the struggle between thegovernment and multinational cigarette manufacturers. As soon as the multinationalsadjusted their marketing strategies, the government modified the tax policies. The flex-ibility of the multinationals has become the biggest challenge for the government, whichhas been following the changes in the market, although always one step behind.

    The next policy modification was significant in revealing how the multinationalscould adjust their market policies, as well as technicalities to adapt to the emergingtaxation system. After calculating that the price reductions of American blend cigaretteswould cost one billion dollars per year to the government (Muderrisoglu 2004), theMinistry of Finance introduced new taxation policies by increasing ad valorem duty witha decrease in proportional tax to secure the government revenues. It reduced the propor-tional excise tax from 55.3 percent to 28 percent, and adjusted the lump-sum tax accord-ing to the amount of Oriental tobacco in the cigarettes (Karatas 2004). The new policy didnot influence the price of high premium American blend cigarettes, as the excise tax wasreduced, but it hit the medium-priced American blends, which would end up with a 30to 80 percent price increase. The Oriental brand cigarettes produced by the monopolywere the sole beneficiaries of the new taxation policy; as the proportion of the Orientaltobacco increased in the blends, the tax would be reduced. This system brought seriousadvantages to cigarettes consisting of high proportions of Oriental tobacco and wasreported in the media as a taxation policy that encouraged national tobacco productionin the country. Furthermore, the policy aimed to increase revenues from the Americanblend cigarettes as well as increasing the market share of the monopoly.

    The new taxation policy was a tough setback for the cigarette multinationals. Theywere aware of the fact that if they increased the prices of medium-priced cigarettes,Turkish smokers would switch to the similar and cheaper monopoly cigarettes. Themultinational cigarette companies, however, were able to overcome this, and moreover,take advantage of the emerging constraint. American brand cigarettes consist of different

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  • percentages of tobacco blends. Though the exact proportions are kept secret, a standardAmerican cigarette has approximately 1015 percent Oriental tobacco and the rest con-sists of Virginia and Burley tobacco. Although most multinationals use the standardizedblend recipes for the most well-known brands (such as Marlboro and Camel), they mightadjust the blend percentages of medium-priced or local cigarettes according to theeconomic or cultural settings of a country. The standardization of cigarettes is a mythwhen it comes to reducing the cost of the cigarettes.

    In response to the modified tax policy, the multinational cigarette companies struckback. JTI openly announced that it increased the Oriental tobacco amount in its brands ofWinston to 34 percent, and of Monte Carlo, More, Anadolu and Winchester to 67 percent,whereas BAT stated that in Viceroy, its most popular brand among Turkish consumers, theamount of Oriental tobacco had increased to 67 percent. Philip Morris stated that it raisedthe Oriental tobacco percentage in certain brands from 24 percent to 34 percent (Ayaydin2005a,b). In fact, the precise increase of Oriental tobacco to 34 percent and 67 percent wasneither coincidental, nor derived from a special recipe that the Turkish smokers might like.According to the new regulation, cigarettes containing 0 to 33 percent Oriental tobaccowould be taxed one million Turkish Lira for a pack, whereas the ones comprising 34 to 66percent Oriental tobacco would be taxed 535,000 Turkish Lira. Finally, cigarettes consistingof more than 67 percent Oriental tobacco would be taxed 350,000 Turkish Lira (DPT 2006,pp. 7273). While at first taxes were determined according to the proportion of tobaccoleaves in the cigarettes, the tax policy then became determined by the blend proportion ofthe cigarettes. The taste of the cigarette and the cigarette taxation policy were tightlyconnected in a manner that continuously influenced and shaped each other. The flexibilityof the multinationals does not just lie in their ways of production, but their ways ofmanaging and adapting to the fluctuations and irregularities of the political and economicsettings of the country. The first round of the taxation conflict was between the Ministry ofFinance and the multinationals, and the second round started when the regulatory agencywas called to perform its duties as a third party.

    When the multinationals reaped benefits from the new taxation policy by craftingnew blends out of the old brands, they not only raised their profit margin for medium-priced cigarettes, but they also started to compete with the monopolys inexpensiveOriental blends, which still had a huge market in Turkey. However, there was no scientificevidence, other than their word, that the companies really made modifications to theirblends. All of a sudden the attention turned to the regulatory agency after a journalistquestioned them:

    For several days, I have been writing the speculations about the multinationalcigarette manufacturers. These companies reported [to the tobacco regulatoryagency] that they had made changes in the proportions of their blends, though theyhad not, in order to pay less tax according to the new lump-sum tax systemannounced by the Ministry of Finance. The only responsible institution in thismatter is the Tobacco Regulatory Agency, and it keeps its silence. I am afraid thatthe silence of the agency confirms the allegations that the state has been losing onebillion dollars every year [from the taxation of cigarettes]. (Ayaydin 2005c; emphasisin original)

    In response to these criticisms, the tobacco regulatory agency published a press releaseon its website (TAPDK 2005), and criticized the accusations as aiming to fabricate

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  • a negative image about the regulatory board by using distorted and contradictoryarguments.

    A directive from the Ministry of Finance, after the introduction of the new taxpolicy, assigned the responsibility for determining the blend percentages in manufac-tured cigarettes to the agency. This newly created responsibility, however, as the regu-latory agency argued, was impossible to achieve. The verification of the blends, such asa precise determination of the increase in the amount of Oriental tobacco in manu-factured cigarettes, was mathematically and scientifically impossible in [our] countryor in the world (TAPDK 2005). The only way to reveal the changes in blend propor-tion was to monitor and investigate production at the cigarette factories during pro-duction. As a result, the agency started to send experts to cigarette factories forinspection. After the observations of 18 different cigarette brands, companies declara-tions about the changes were found to be correct, and results of the investigation werereported to the Ministry of Finance (TAPDK 2005).

    While before the implementation of the new taxation policy in August 2004, theregulatory agencys monitoring was limited to smoke and chemical analyses of ciga-rettes, the agency was now required to obtain detailed information about blends in thefactories. This new role imposed on the regulatory agency by the ministry was not wellreceived by the cigarette multinationals. As one of the multinational representativesexpressed it:

    The state said that I want to know [the blends] because you cannot keep a secretfrom the state. I want to know not only the proportions of Burley, Virginia andOriental tobacco, but also how much of the blend is constituted of Virginia, recon-stituted and expanded tobacco in the cigarettes. Therefore, what was asked from uswas to provide the entire blend recipe. [. . .] We objected, and told them then wewould stop our production [in Turkey]. It was the last straw for us. Such a thing canhappen only in Turkey. [. . .] This is a trade secret. At the same time, according to the2001/37/EC,14 we also have to tell them the additives and aromas that we are usingin the cigarettes. They want to have the blend recipe as well as the list of additivesused in the cigarettes. This is a wrong policy.15

    Supervising the blend proportions of cigarettes became the newly assigned respon-sibility of the agency after the controversy between the Ministry of Finance and themultinationals. The multinationals dismissed the new regulation on the grounds that theagency was not carrying out its premise of being a neutral and objective institution. Likethe monopoly officials, they criticized the agency for taking sides in the sector but with adifference: for them, the ally of the agency was the state. They argued that the agency wasundertaking its responsibilities with a state-centric vision and working against the mul-tinationals under political pressures driven by the government. According to the multi-nationals, the impartial global institutional structure was translated into the Turkishsetting with a covert agenda of enhancing the state influence in the market.

    The case, however, illustrates that the regulation policies were decided and imple-mented as a consequence of the controversy. Like the first case, the second example showsthat the decision-making of the agency was concluded following the multilayered rela-tionships among different actors. In other words, the regulatory policy was establishedafter the agency took an action. It was not the preexisting policies that generated theregulatory practices, but the practices that created the policies.

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  • 3. Conclusion

    Lets think about the two conflicts that the tobacco agency had to deal with. In the firstincident, there was no rule requiring that the agency had to check the machines boughtfor the monopolys cigarette factories. The agency was called into action only after thespread of the speculation about the so-called corrupt purchase of the hard-box packingmachines. In the end, a new responsibility (checking the status of machines) was addedto the duty list of the agency. This role emerged after the lingering dispute that includedseveral actors: the monopoly, the Ministry of Finance, the experts, the hard-box cigarettemachines, and the expert reports. The second incident was similar to the first in terms ofthe variety of actors involved in the process: the Ministry of Finance, the cigarettemultinationals, the experts, and different types of tobacco blends. The fluid network wasnot confined merely to the social relationships of people but also involved other materials(such as machines, tobacco blends, and expertise reports). This controversy also startedwith speculation that the multinationals had changed the percentage of Oriental tobaccoused in the cigarettes, but not to the same proportions as announced. In the end, similarto the first incident, checking the cigarette blends of the multinationals became the newresponsibility of the agency. In both cases, the regulatory agency was interpellated by theMinistry of Finance to fulfill a new set of duties attached to the agency structure. Aftereach case, the structure of the agency has considerably changed along the translationprocess, and it has taken on new obligations and responsibilities that did not exist in theoriginal model.

    Both the IMF and the World Bank have been insistent about the implementation oflegal and economic reforms oriented toward harmonizing regulatory practices in Turkeywith global standards. The pressure put on the shoulders of the Turkish government tobring the political and economic structures into line with so-called global standards wasvery powerful. After the economic crisis of 2001, when the Turkish government had nochoice but to enact laws imposed by international financial institutions, new globalinstitutions, with their accompanying laws and policies, were being imported, justified,and put into practice. The traveling of standardized institutions as well as their policies,however, have not yielded to the emergence of their replicas. The global institutionalmodels were transformed as they moved into new settings. As mentioned previously,what is significant here was the dynamic process of translation itself, which producedsomething new, regardless of preexisting choices and categories. The translation processhas occurred through the formation of new alliances, contestations, resistance, and nego-tiations among the actors. The regulation, in the end, was brought about through acomplex set of improvisations of the agencythat is, a process I call, with Latoursinspiration (1987), Policy in the Making. It was the policy being made in the translationprocess at the moment, rather than all made policy or ready-made policy which wasshaped and directed by the predetermined strategies of either public or private actors.The perpetual struggles among the actors, their conflicts, resistance, negotiations, shapedthe entire process and created an ambivalent and amorphous regulatory space. It wasneither a legal text, such as a law or regulation, nor a global standard policy imposed byinternational financial institutions, but the multilayered interrelations among the actorsthat engendered the creation of a new regulatory practice. The functioning of the agencywas more complicated than it was presented within the framework of conscious choicesof individuals or the dominating social and political structure that works for enhancing

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  • and promoting the interests of either the state or the multinationals. Instead, the regu-latory process, as shown in the two cases, was changing according to the slippery rela-tionships among the actors in the sector. The agency was carrying on its duties on thebasis of expectations, resistance, and negotiations of the actors. In other words, the agencydid not have ready-made policies but, on the contrary, the regulatory process was embed-ded in an assemblage16 that involved a multiplicity of actors.

    As Mosse (2004) shows in the case of development agencies, the institutional prac-tices are not always driven by policies, but instead practices are generating policies. Simplyput, the policy is not initiated according to a predesigned model but it is an outcome ofthe practices, and the coherence attributed to the policy is established through politicalacts of composition (Latour 2000). Similarly, in both controversies, the Turkish tobaccoagency followed the interactions among the actors in the market first, and then madedecisions to regulate the sector, which were turned into regulatory policies afterwards. Inboth cases, the agency took action after the fact in the market was already constituted.This is exactly what the director of research at the Atlanta District branch of the FederalReserve Board stated for the regulation of markets: systems, instruments, and marketsare evolving faster than the political entities can bring their various rules and regulatorsinto harmony (Riles 2006, p. 92). The technocrats in the agency decided on the policiesafter the market had created its new rules and strategies. This temporal incongruity(Miyazaki 2003) between the regulatory agencys knowledge of the market and transfor-mations taking place in the market result in an improvised version of policy hinging uponexpectations, speculations, or predictions, produced through the actions of a multitudeactors.17

    The inevitable belatedness of the regulatory practice arose from the fact that itsobject, the market, was always in a process of change, and there were no ready-madepolicies that could handle all these changes. The fact that the regulative policieswere tailored according to changes in the market and shaped through a set of nego-tiations among the involved actors, demonstrates the absence of coherent policiesbeforehand. Documents, such as laws, regulations, expert reports, and pictures, do notnecessarily correspond with the reality of the market. While, on paper, a system canseem to operate in abstract time, in practice, it operates through the temporal nego-tiations of actors in real time. In an environment of enormous uncertainty, in whichpolicy choice cannot be derived from the laws and regulations, anticipations, specula-tions, and intuitions play a significant role in decision-making (Holmes & Marcus2004, 2006).

    The tobacco regulatory board was weaving its technocratic practice in real time.Rather than following ready-made policies, the policies being created as a consequence ofactions were followed. Regulatory practice was being made through a series of interac-tions of actors in this process, which resulted in the ossification of action at one point in the form of laws and regulations.

    Acknowledgment

    This research was made possible by generous support from the Social Science ResearchCouncil and the American Research Institute in Turkey. I am grateful to George Marcus,Chris Kelty, Hannah Landecker, James Faubion, and Cemre Baytok for their helpfulcomments and suggestions on earlier drafts of this article.

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  • Notes

    1 The legal name of the agency is Tobacco, Tobacco Products and Alcoholic Beverages Market

    Regulatory Agency. It not only regulates the production and sales of tobacco but also of

    alcoholic beverages. This paper, however, does not discuss the regulation of alcoholic bever-

    ages, which is undertaken by a separate group of experts in the agency.

    2 Interestingly enough, in the first inaugural board, there were no farmers.

    3 There is a huge and continually expanding literature in organization studies discussing the

    imported global models. Translation (Czarniawska-Joerges & Sevon 1996; Frenkel 2005),

    traveling (Perry 1995), and hybridization (Frenkel & Shenhav 2003; Frenkel 2008) are the

    concepts that are employed to articulate a deeper understanding of how these global models

    change as they flow from one place to another.

    4 The sugar law stipulated that the agency may be terminated in 2004 and the clause became

    effective by a decree of the Council of Ministers. However, the sugar agency will be opened

    again in 2008 after several action of annulments.

    5 For a detailed comparison, see Gumus (2009).

    6 The Turkish government opened the tobacco market to foreign cigarette manufacturers

    as part of its efforts to follow economic liberalization policies, but the precondition for

    these companies was to make a joint investment with the tobacco monopoly. In 1991, the

    cigarette multinationals were granted the right to market, price, and distribute their own

    brands.

    7 See the document number B.02.1.OIB.0.65.00.00/10937, TC. Basbakanlik Ozellestirme Idaresi

    Baskanligi, 3 November 2004.

    8 Dursun Akdemir from the True Path Party was the deputy who brought the issue to the

    Parliament on 30 September 2004 (interpellation number 7/3739).

    9 Three years later, the corruption case would be detailed in the newspapers revealing the

    connection between the son of the minister and the head of the exporting company. See

    Kivanc, Yine Unakitan Ismi, Radikal, 11 November 2007.

    10 See the response of the Minister of Finance, Kemal Unakitan, on 3 November 2004 (Document

    number B.02.1.OIB.0.65.00.00/10937, TC. Basbakanlik Ozellestirme Idaresi Baskanligi).

    11 Drawing from Lacans work, Althusser (1971) coins the concept of interpellation. He argues

    that individuals are interpellated, or hailed into subject positions. Thus, a policeman who

    calls to us is interpellating us into a position of subjugation by the state. In other words, we

    become what we have been identified as.

    12 When the law was first enacted, the legislation required the production of at least two billion

    cigarettes a year and more than 15 tons of other tobacco products in a single shift by

    companies using complete and new technology. In August 2003, the clause complete and

    new technology was changed to integrated establishment. But in less than five months, it

    was switched back to complete and new technology.

    13 For details, see Bayer (2005a). Ilginc Uc Rapor, Hurriyet, 30 November 2005. The first report

    written by the tobacco agency experts on 8 November 2004 stated that [. . . ] the chassis and

    skeleton of the machines are old and used; the machines were overhauled and repaired and

    it also added that the machine parts were all derived from other machines. The second report

    of December 2004 declared no evidence is found that the machines were used.And, lastly, the

    third report written in July 2005 puzzled everybody with its confusing text: although some

    experts determined that the machines were produced before the date of their announced date

    of production, the machines are new and unused.

    14 Directive 2001/37/EC of the European Parliament and of the Council of 5 June 2001 on the

    approximation of the laws, regulations and administrative provisions of the Member States

    concerning the manufacture, presentation and sale of tobacco products.

    15 Personal interview conducted on 3 July 2006.

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  • 16 I use the concept assemblages as defined by Stephen Collier and Aihwa Ong (2004, p. 12): An

    assemblage is the product of multiple determinations that are not reducible to a single logic.

    It denotes the multiplicity of interconnected techniques and actors (both human and non-

    human) in a heterogeneous, contingent, unstable, partial, and situated unstructured structure.

    17 In a similar vein, Schwegler (2004), in her study of expert negotiations on pension reform in

    Mexico, shows how the decisions of technocrats were always anticipatory, that is, they were

    shaped by the anticipated reactions of others.

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