The Ups and Downs
of Turkish Growth, 2002-2015: Political Dynamics, the European Union and the
Institutional Slide by Daron Acemoglu and Murat Ucer
NBER Working Paper No. 21608; Issued in October 2015
We document a change in the character and quality of Turkish
economic growth with a turning point around 2007 and link this change to the
reversal in the nature of economic institutions, which underwent a series of
growth-enhancing reforms following Turkey's financial crisis in 2001, but then
started moving in the opposite direction in the second half of 2000s. This
institutional reversal, we argue, is itself a consequence of a turnaround in
political factors. The first phase coincided with a deepening in Turkish
democracy under the prodding and the guidance of the European Union, and
witnessed the waning of the military's influence and the broadening of
effective political participation. As Turkey-European Union relations collapsed
and internal political dynamics removed the checks against the domination of
the governing party, in power since 2002, these political dynamics went into
reverse and paved the way for the institutional slide that is largely
responsible for the lower-paced and lower-quality growth Turkey has been
experiencing since about 2007.
--
Harvard economist Dani Rodrik on Turkey
http://www.project-syndicate.org/commentary/markets-misread-erdogan-victory-by-dani-rodrik-2015-11