Political Economy of Turkey (1980–2001)

Abstract

The chapter deals with the institutionalization of a reactive Turkish state in a neoliberal setting between 1980 and 2001. Kutlay argues that post-liberalization process in Turkey was accompanied by gradual deterioration of state capacity. Thus economic and political opportunities, which were structured by the state, led to self-reinforcing processes for the entrenchment of clientelistic policy coalitions. The chapter also discusses that Turkey’s integration into vagaries of financial globalization without robust institutional regulatory mechanisms also aggravated fiscal problems. The Ponzi-cum-funding-opportunities enabled policy-makers to postpone necessary reforms so that Turkey faced an early test in 1994. The economic crisis, however, argues Kutlay, did not invite a new paradigm in Turkish political economy. Status quo ante was reproduced because (a) crisis was not deep enough to deteriorate the legitimacy of predominant paradigms and disturb the existing mode of state-market relations, and (b) agency and institutional-level dynamics were unfavorable to initiate substantial reforms.