Turkey has been characterized with a sui generis democracy and economy compared to other Middle Eastern or Muslim countries. As the the political system of Turkey has changed over time and moved towards a Western-type of democracy, Turkish economy has not stayed the same inevitably. The role of the state has got minimized and neoliberal policies have got more influential in the course of time. This article is an attempt to adress the main themes of neo-libeal economic practices in Turkey. In other words, the economic reflections of neoliberal ideology based on the structural and historical developments in Turkey in the post-1980 period constitute the main topic of this article.

Theoretical Considerations

Liberalism in the widest sense stresses individual liberty. The liberal ideology argues that individuals have certain inalienable rights. Liberalism has been diversified in the course of time. Neo-liberalism has been one of them. Neo-liberal ideology has a discourse that stresses the importance of free market economy and privatization. It argues that state intervention in economic affairs should be at a minimum level where non-state actors can find enough space and opportunuties.

Neo-liberalism states that in a wide range of activities such as protection of the environment, ensuring job security, education and health government intervention should be minimized as much as possible. The state should be in a position to rule and inspect these areas. Neo-liberal policies can briefly be summarized as abolishing the legal and bureaucratic obstacles that prevent the accumulation and participation of the private sector, providing an environment in which the price levels in the labor market can spontaneously occur, reducing the expenditure of the state in the social arena, and privatizing the public sector as much as possible.[1]

Turkish Economy in the Post-1980 Period

The date of September 12, 1980 implies a military coup in Turkey through which Turkey has witnessed major changes in economy and politics. Neo-liberalism refers to a particular mentality that involves the “normative imposition of globally-contoured, locally-actualized market rationality on political, social and cultural spheres.”[2] It is also called as “market-political rationality”[3]

Thee rule by the military that continued until 1983 has been a turning point for Turkey. On the one hand, it meant a crushing blow to the left ideology; on the other hand, it witnessed a radical change in the national economic strategy. The economic state understanding moved away from the import substitution industrialization (ISI) policy that had been in practice since the 1960s to an economic strategy based on exports, called export-oriented strategy.

The economic model based on export was embedded in a larger turn toward a market-based neoliberalism, pushed through by the new military rule. This included liberalization of trade and interest rates, privatization of State Economic Enterprises (SEEs), and the cutting of agricultural subsidiaries. Another crucial component of the new neoliberal policies was the 1989 liberalization of the capital account, which paved the way for the free capital inflows and outflows.

The neo-liberal practices in Turkey rose with the rule of Turgut Özal, Özal had been a decisive actor in paving the way for the minimization of state role in economic affairs. What Ozal desired was the speedy implementation of market-oriented reforms. With the end of 1990s, the Turkish economy was integrated into the international financial system, and thus became open to speculative attacks from international finance capital.[4] The 2001 economic crisis proved to be a very critical event in breaking the impasse of the 1990s.

After the 2000-2001 crisis the reaction to crisis, the path towards EU accession and pressures from international actors like the IMF and the World Bank all played major roles in the development of Turkish economic institutions. In the post-crisis period, a new economic program emerged to enable a sustainable neoliberalism in line with the post-Washington Consensus framework.[5] After the 2001 crisis, the political instability has been one of the main factors which led to the political victory of the Justice and Development Party. After 2001 economic crisis, not only the Turkish economy but also the Turkish politics got profoundly transformed under the Justice and Development Party rule.

Turkish Economy Under Justice and Development Party Rule

The JDP rose to power in 2002 under Erdoğan’s leadership, and the party weakened the Kemalist actors within the state. The changing power balance within the state was complemented by the adoption of a new base of support in the business circles. Turkey was seen as a model country by Western powers in the early 2000s because it successfully embraced the neoliberal economic policies and “moderate Islamist” values. After 2002, the stability of the one-party-rule of JDP was welcomed by all segments of the bourgeoisie since it immediately committed itself to the neoliberal economic model.

The JDP governments have been at least for the first years of office characterized by their implementation of standard neoliberal measures. Recep Tayyip Erdoğan first pushed for Turkey’s accession to the European Union. This was part of a strategy in order to subordinate the military to civilian authority. Erdoğan’s insistence on the EU membership was a very significant factor that at once further reduced the influence of the Kemalists, while also securing a victory in the eyes of public opinion. As Isabel David observes, “Reforms aiming at complying with the Copenhagen criteria directly targeted the very heart of Kemalist power (namely the military, the judiciary, the Constitution/legal system and the Presidency) and were instrumental in securing the AKP’s supremacy.” [6]

The EU reforms made Turkey approach to a rule-based technocratic structure, and change civilian-military relations to the advantage of the civilian actors. The democratizing reforms also secured the support of liberal and left-liberal people in Turkey, thus further stabilizing the AKP’s electoral base of support. The second pillar of Erdoğan’s strategy was a push further in the direction of economic liberalization. The plan came in the form of the IMF’s stand-by arrangement, the Transition to a Strong Economy, which formed the backbone of the economic policies of JDP.

The JDP has always defined its identity as “conservative” and between 2002 and 2007, it emphasized its strong commitment to Western democratic values and neo-liberal economic principles. In this period, it carried out a comprehensive neoliberal program that prioritized economic concerns and also market rationality. However, particularly since 2007, patriarchal values often framed by religion have increasingly become dominant.

Before 2002, the Turkish economy was characterized by high inflation and instability. During the JDP rule, as economic stability was restored the concerns about return of inflation and crisis had been decreased to an important degree and people thought that neo-liberal policies were the only possible alternative for Turkey. Erdoğan rule saw the neoliberal program initiated by the previous government as a ready-made recipe. In fact, the JDP government even lacked an experienced team among its cadres when it came to power so they didn’t have any serious economic program of their own. However the first step that the JDP government had taken was about privatization policies. Privatization can be viewed as an important policy area in which Turkey has undertaken a significant break from the past. By the end of the 1990s, the legal infrastructure for privatization was almost complete.[7]


As concluding remarks, it can be said that, based on the above-given general assumptions of neo-liberalism, it can be said that Turkey has not had a stabile relationship with neo-liberalism. The political crisis, military coups and rise and fall of different ideologies along with the factors of foreign actors like the relationship with IMF or the impact of globalization all shaped Turkey’s unique neo-liberalism both in concept and practice.



[1] Keith Faulks, Political Sociology, USA: New York University Press, 1999, p. 75.

[2] Wendy Brown, Neo-liberalism and the end of liberal democracy. Edgework: Critical essays on knowledge and politics, Princeton: Princeton University Press, 2006, p. 693.

[3] Ibid

[4] Korkut Boratav and Yeldan Erinç, “Turkey, 1980–2000: Financial Liberalization, Macroeconomic (In)Stability, and Patterns of Distribution,” in External Liberalization in Asia, Post-Socialist Europe, and Brazil, ed. Lance Taylor, Oxford New York: Oxford University Press, 2006.

[5] Ziya Öniş and Fikret Şenses, “Rethinking the Emerging Post-Washington Consensus,” Development and Change, 36/2, 2005, pp. 263-290.


[6] Isabel David, “Strategic Democratisation? A Guide to Understanding AKP in Power,” Journal of Contemporary European Studies 24/4, 2016, p. 482.

[7] Patton, M. J. “The economic policies of Turkey’s AKP government: Rabbits from a hat?” The Middle East Journal 60, no. 3 2006, pp. 513-536.


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