The EU or national reform program for Turkey: Does the political feasibility depend on the EU’s absorption capacity?

Concerns of the EU countries on Turkey’s membership are summarized by the term ‘EU’s absorption capacity’. This implies that Turkey may end up as a member of the EU or may not. Even the reform process can abruptly come to an end due to reasons irrespective of the performance of Turkey. In a two-sector model, we show that despite this uncertainty, if before the start of the reform program a ‘no’ is perceived as less likely, the EU-reform will be supported ex-ante. However, a ‘no’ at the midst of the EU reform program can block the reform process ex-post, since both of the sectors suddenly find themselves in a position that they should have not accepted beforehand. Moreover, such a situation can render continuing with the alternative national reform program very hard.