In the 1960s, the domestic industry (with the almost total exclusion of foreign consumer goods) captured local markets with high profit margins. A competition-free environment, however, caused misallocation of resources and a maximization of costs in industry. The favorable exchange rates accorded to the investment goods contributed to the capital-intensive industries, which were characterized, by low efficiency and high costs as a result of being domestically oriented (Barkey, 1984). Low industrial efficiency was the result of Turkish development planning, which emphasized high growth rates through a large allocation of investment to import-substituted basic industry and the direction and the use of administrative regulation rather than incentives to ensure the effective functioning of the market.