Hostname: page-component-7b7567c8c-2n9c9 Total loading time: 0 Render date: 2026-11-14T20:04:04.147Z Has data issue: false hasContentIssue false
  • English
  • Français

Rushing toward currency convertibility

Published online by Cambridge University Press:  05 March 2015

Kurtuluş Gemici
Kurtuluş Gemici*
Affiliation:
National University of Singapore, Department of Sociology, AS1, 11 Arts Link, 117570, Singapore, kgemici@nus.edu.sg
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the 'Save PDF' action button.

In 1989, Turkey became one of the first—and few—emerging economies to fully liberalize its capital account. Given the adverse macro-economic conditions before the reforms, it is puzzling that Turkish policy-makers implemented policies amounting to a comprehensive and imprudent capital account liberalization. Using in-depth interviews with a significant number of key decision-makers behind capital account liberalization and employing archival material from news sources on the debates surrounding the reform process, this article examines the policy objectives and rationale behind the Turkish capital account liberalization. The main argument is that capital account liberalization represented a political rationality that put a premium on short-term expansion through funds from the rest of the world. This liberalization was a policy response to decreasing rates of economic growth and demands from organized labor and public employees for better working conditions and higher wages. Thus, this article shows that these distributional conflicts and the trajectory of economic growth were important determinants of the timing and scope of capital account liberalization in Turkey.

Keywords

Capital account liberalizationcurrency convertibilityfinancial openingTurkeyneoliberalism

References

Abdelal, Rawi. Capital Rules: The Construction of Global Finance. Cambridge, MA: Harvard University Press, 2007.Google Scholar
Agosin, Manuel R.“Capital Inflows and Investment Performance: Chile in the 1990s.” In Capital Flows and Investment Performance: Lessons from Latin America, edited by Ffrench-Davis, Ricardo and Reisen, Helmut, 111–146. Paris: OECD, 1998.Google Scholar
Akyüz, Yılmaz. “Financial System and Policies in Turkey in the 1980s.” In The Political Economy of Turkey: Debt, Adjustment and Sustainability, edited by Arıcanlı, Tosun and Rodrik, Dani, 98–131. London: MacMillan, 1990.CrossRefGoogle Scholar
Alper, C. Emre and Öniş, Ziya. “Emerging Market Crises and the IMF: Rethinking the Role of the IMF in Light of Turkey’s 2000–2001 Financial Crisis.” Canadian Journal of Development Studies 24, no. 2 (2003): 267–286.CrossRefGoogle Scholar
Alper, C. Emre and Öniş, Ziya. “Financial Globalization, the Democratic Deficit, and Recurrent Crises in Emerging Markets: The Turkish Experience in the Aftermath of Capital Account Liberalization.” Emerging Markets Finance and Trade 39, no. 3 (2003): 5–26.CrossRefGoogle Scholar
ANKA Economic Bulletin, August 9,1989; August 11,1989.Google Scholar
Arıcanlı, Tosun. “The Political Economy of Turkey’s External Debt: The Bearing of Exogenous Factors.” In The Political Economy of Turkey: Debt Adjustment and Sustainability, edited by Arıcanlı, Tosun and Rodrik, Dani, 230–253. London: MacMillan, 1990.CrossRefGoogle Scholar
Aşıkoğlu, Yaman. “Strategic Issues in Exchange Rate Liberalization: A Critical Evaluation of the Turkish Experience.” In Economics and Politics of Turkish Liberalization, edited by Nas, Tevfik N. and Odekon, Mehmet, 101–123. Cranbury, NJ: Associated University Presses, 1992.Google Scholar
Babb, Sarah L.Managing Mexico: Economists from Nationalism to Neoliberalism. Princeton, NJ: Princeton University Press, 2001.CrossRefGoogle Scholar
Babb, Sarah L. and Carruthers, Bruce C.“Conditionality: Forms, Function, and History.” Annual Review of Law and Social Science 4 (2008): 13–29.CrossRefGoogle Scholar
Balkan, Erol and Yeldan, Erinç.“Turkey.” In Financial Reform in Developing Countries, edited by Fanelli, Jose and Medhora, Rohinton, 129–155. New York, NY: St. Martin’s Press, 1998.CrossRefGoogle Scholar
Blyth, Mark. Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. New York, NY: Cambridge University Press, 2002.CrossRefGoogle Scholar
Boratav, Korkut. “Inter-Class and Intra-Class Relations of Distribution Under ‘Structural Adjustment’: Turkey During the 1980s.” In The Political Economy of Turkey: Debt, Adjustment and Sustainability, edited by Arıcanlı, Tosun and Rodrik, Dani, 199–229. London: MacMillan, 1990.CrossRefGoogle Scholar
Boratav, Korkut. Türkiye Iktisat Tarihi: 1908–2002. Ankara: imge, 2003.Google Scholar
BoratavKorkut, A. Korkut, A.Erinç, Yeldan and Köse, Ahmet Η.“Turkey: Globalization, Distribution and Social Policy, 1980–1998.” In External Liberalization, Economic Performance, and Social Policy, edited by Taylor, Lance, 317–363. Oxford: Oxford University Press, 2001.CrossRefGoogle Scholar
Chwieroth, Jeffrey M.Capital Ideas the IMF and the Rise of Financial Liberalization. Princeton, NJ: Princeton University Press, 2010.Google Scholar
Chwieroth, Jeffrey M.“Neoliberal Economists and Capital Account Liberalization in Emerging Markets.” International Organization, no. 61 (2007): 443–463.Google Scholar
Cizre-Sakallıoğlu, Ümit and Yeldan, Erinç.“Politics, Society and Financial Liberalization: Turkey in the 1990s.” Development and Change 31, no. 2 (2000): 481–508.CrossRefGoogle Scholar
Cizre, Ümit and Yeldan, Erinç.“The Turkish Encounter with Neo-liberalism: Economics and Politics in the 2000/2001 Crises.” Review of International Political Economy 12, no. 3 (2005): 387–408.CrossRefGoogle Scholar
Cumhuriyet, July 7, 1989; July 8, 1989; August 10, 1989; August 12, 1989; August 14, 1989; August 15, 17, 1989; August 28,1989; September 3,1989; September 12,1988.Google Scholar
Demir, Fırat. “A Failure Story: Politics and Financial Liberalization in Turkey, Revisiting the Revolving Door Hypothesis.” World Development 32, no. 5 (2004): 851–869.CrossRefGoogle Scholar
Doğruel, Fatma and Doğruel, A. Suut. Türkiye’de Enflasyonun Tarihi. Ankara: TCMB, 2005.Google Scholar
Eğilmez, Mahfi. Light Günlük, İstanbul: OM Yayınevi, 2001.Google Scholar
Eichengreen, Barry J.“Capital Account Liberalization: What Do Cross-Country Studies Tell Us?” The World Bank Economic Review 15, no. 3 (2001): 341–365.CrossRefGoogle Scholar
Ergüder, Üstün. “The Motherland Party, 1983–1989.” In Political Parties and Democracy in Turkey, edited by Heper, Metin and Landau, Jacob M.152–169. London: I.B. Tauris, 1991.Google Scholar
Ersel, Hasan. “The Timing of Capital Account Liberalization: The Turkish Experience.” New Perspectives on Turkey, no. 15 (1996): 45–64.CrossRefGoogle Scholar
Ffrench-Davis, Ricardo and Ocampo, José Antonio. “The Globalization of Financial Volatility: Challenges for Emerging Economies.” In Financial Crises in “Successful” Emerging Economies, edited by Ffrench-Davis, Ricardo1–37. Washington, DC: Brookings Institution Press, 2001.Google Scholar
Fourcade-Gourinchas, Marion and Babb, Sarah L.“The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries.” American Journal of Sociology 108, no. 3 (2002): 533–579.CrossRefGoogle Scholar
Frieden, Jeffry A.“Invested Interests: The Politics of National Economic Policies in a World of Global Finance.” International Organization 45, no. 4 (1991): 425–451.CrossRefGoogle Scholar
Haas, Peter M.“Epistemic Communities and International Policy Coordination.” International Organization 46, no. 1 (1992): 1–35.CrossRefGoogle Scholar
Hale, William M.The Political and Economic Development of Modern Turkey. New York, NY: St. Martin’s Press, 1981.Google Scholar
Hale, William M.“Transition to Civilian Governments in Turkey: The Military Perspective.” In State, Democracy and the Military: Turkey in the 1980s, edited by Heper, Metin and Evin, Ahmet159–175. New York: Walter de Gruyter, 1988.CrossRefGoogle Scholar
Heper, Metin. “Interest Group Politics in Post-1980 Turkey: Lingering Monism.” In Strong State and Economic Interest Croups: The Post-1980 Turkish Experience, edited by Heper, Metin, 163–176. Berlin: Walter de Gruyter, 1991.CrossRefGoogle Scholar
İstanbul Stock Exchange. From the Foundation of the Republic to the Present. Vol. 2, Turkish Financial History From the Ottoman Empire to the Present, İstanbul: İstanbul Stock Exchange, 1999.Google Scholar
Karpat, Kemal H.“Military Interventions: Army-Civilian Relations in Turkey Before and After 1980.” In Stote, Democracy and the Military: Turkey in the 1980s, edited by Heper, Metin and Evin, Ahmet137–158. New York: Walter de Gruyter, 1988.CrossRefGoogle Scholar
Kazdağlı, Hasan. “Özal’ın Iktisadi Reformları.” In Kim Bu Özal? Siyaset, Iktisat, Zihniyet, edited by Sezai, ihsan and Dağı, ihsan, 443–470. İstanbul: Boyut, 2001.Google Scholar
Kazgan, Gülten. Türkiye Ekonomisinde Krizler (1929–2001). İstanbul: Bilgi Üniversitesi Yayınları, 2005.Google Scholar
Kepenek, Yakup and Yentürk, Nurhan. Türkiye Ekonomisi, İstanbul: Remzi Kitabevi, 2000.Google Scholar
Keyder, Çağlar. Stote and Class in Turkey: A Study in Capitalist Development. Guildford, UK: Verso, 1987.Google Scholar
Kıray, Emine. “Turkish Debt and Conditionality in Historical Perspective: A Comparison of the 1980s with the 1860s.” In The Political Economy of Turkey: Debt Adjustment and Sustainability, edited by Arıcanlı, Tosun and Rodrik, Dani, 254–268. London: MacMillan, 1990.CrossRefGoogle Scholar
Krasner, Stephen. “The International Monetary Fund and the Third World.” International Organization 22, no. 3 (1968): 670–688.CrossRefGoogle Scholar
Lukauskas, Arvid and Minushkin, Susan. “Explaining Styles of Financial Market Opening in Chile, Mexico, South Korea, and Turkey.” International Studies Quarterly, no. 44 (2000): 695–723.CrossRefGoogle Scholar
Minushkin, Susan. “Financial Globalization, Democracy, and Economic Reform in Latin America.” Latin American Politics and Society 46, no. 2 (2008): 151–165.CrossRefGoogle Scholar
Oyan, Oğuz. Dışa Açılma ve Mali Politikalar, Türkiye: 1980–1989. Ankara: Verso, 1989.Google Scholar
Öniş, Ziya. “The Dynamics of Export Oriented Growth in a Second Generation NIC: Perspectives on the Turkish Case, 1980–1990.” New Perspectives on Turkey, no. 9 (1993): 75–100.CrossRefGoogle Scholar
Öniş, Ziya. “Globalization and Financial Blow-Ups in the Semi-Periphery: Turkey’s Financial Crisis of 1994 in Retrospect.” In State and Market: The Political Economy of Turkey in Comparative Perspective, edited by Öniş, Ziya, 513–529. İstanbul: Boğaziçi University Press, 1998.Google Scholar
Öniş, Ziya. “Political Economy of Turkey in the 1980s: Anatomy of Unorthodox Liberalism.” In Strong State and Economic Interest Croups: The Post-1980 Turkish Experience, edited by Heper, Metin, 27–40. Berlin: Walter de Gruyter, 1991.Google Scholar
Özbudun, Ergün. “The Post-1980 Legal Framework for Interest Groups Associations.” In Strong Stote and Economic Interest Croups: The Post-1980 Turkish Experience, edited by Heper, Metin, 41–53. Berlin: Walter de Gruyter, 1991.Google Scholar
Pamuk, Şevket“ithal ikamesi, Döviz Darboğazları ve Türkiye, 1947–1979.” In Krizin Gelişimi ve Türkiye’nin Alternatif Sorunu, edited by Boratav, Korkut, Keyder, Çağlar and Pamuk, Şevket, 36–68. Ankara: Kaynak Yayınları, 1984.Google Scholar
Simmons, Beth A.Frank, Dobbin and Garrett, Geoffrey. “Introduction: The International Diffusion of Liberalism.” International Organization 60, no. 4 (2006): 781–810.CrossRefGoogle Scholar
Snowden, Peter N.“Financial Reform in Turkey Since 1980: Liberalization Without Stabilization.” In The Economy of Turkey Since Liberalization, edited by Togan, Subidey and Balasubramanyam, V.N.67–87. New York: St. Martin’s Press, 1996.Google Scholar
State Institute of Statistics. Statistical Indicators, 1923–2002. Ankara: State Institute of Statistics, 2003.Google Scholar
Stiglitz, Joseph E.“Capital-Market Liberalization, Globalization, and the IMF.” Oxford Review of Economic Policy 20, no. 1 (2004): 57–71.CrossRefGoogle Scholar
Tachau, Frank. “An Overview of Electoral Behavior: Toward Protest or Consolidation of Democracy.” In Politics, Parties, and Elections in Turkey, edited by Sayan, Sabri and Esmer, Yılmaz33–54. Boulder, CO: Lynne Riener, 2002.CrossRefGoogle Scholar
Ulagay, Osman. Özal’ı Asmak Için. İstanbul: AFA, 1988.Google Scholar
Yeldan, A. Erinç.“Neoliberal Global Remedies: From Speculative-Led Growth to IMF-Led Crisis in Turkey.” Review of Radical Political Economics 38, no. 2 (2006): 193–213.CrossRefGoogle Scholar
Yeldan, Erinç A.Küreselleşme Sürecinde Türkiye Ekonomisi: Bölüşüm, Birikim ve Büyüme, İstanbul: iletişim Yayınları, 2001.Google Scholar
Yeşilada, Birol Ali. “Problems of Political Development in the Third Turkish Republic.” Policy 21, no. 2 (1988): 345–372.Google Scholar