ABSTRACT
The Turkish market economy has gone through major transformations in the last few decades. In this emerging country with daring aspirations to be placed in the first league of advanced countries and to play a significant role in world politics, the encounter between the institutional legacies and the newly transplanted institutions has caused considerable tension, at times, endangering the effectiveness of the latter. Despite such aspirations and substantial changes that have taken place in the recent past, institutional characteristics of the Turkish market economy display major differences from those of the advanced countries. This chapter suggests that some of the key institutions and patterns of governance inherited from the old regime persist, bestowing on the Turkish market economy an illiberal character. By and large, market liberalisation coexists with old institutions and norms, while the former is often moulded by the latter. Demonstrating the coupled processes of change and continuity with respect to recent transformations in Turkey, the chapter asserts that the Turkish Variety of Capitalism (VoC) is situated between patrimonial, statist and liberal varieties construed as ideal types for emerging countries (see Becker's Introduction to this volume). The following sections of this chapter will examine the major transformations that have taken place with regard to institutions and policy making throughout the multifaceted market transitions since the 1980s. Following an introduction on such transformations, particularly with respect to state–economy relations, the chapter will focus on several dimensions that help delineate the VoC, including corporate governance and state–capital relations; labour–capital and labour–state relations; social policy; and privatisation.
