ABSTRACT
The economic development regime in Turkey went through a fundamental change from one of inward-oriented import substitution industrialization to one where the market mechanism played a more significant role in the allocation of resources. The purpose of this chapter is to provide an account of the evolution of institutions of economic policy that accompanied the changes in the development regime.
The paper argues that economic liberalization notwithstanding, economic policy institutions in the 1980s and 1990s were overall characterized by increased centralization and a high degree of discretionary authority retained by the government. By contrast, during the 2000s more rule-based and relatively non-discriminatory institutions emerged, and substantial degree authority was delegated to relatively independent administrative agencies. The chapter discusses the roles of the economic crisis of 2000–01, global trends and the European Union accession process in this development. It also reviews policy areas where centralization and discretionary forms of intervention persisted or increased during this period, namely public procurement and construction where the government retained significant instruments that could be used to create and allocate rents to favoured companies. The chapter then discusses the reversal towards more discretionary forms of intervention in the last few years and the political underpinnings of this trend.
