The Political Economy of AK Party Rule in Turkey: From a Regulatory to a Developmental State?

Abstract

The macroeconomic and financial stability orientation of AK Party governments, with their emphasis on fiscal discipline and the regulatory function of the state in the financial system, has allowed the Turkish economy to firmly withstand several internal and external shocks. Nevertheless, low economic growth, as well as high inflation, interest, and unemployment rates, and an unsustainable current account deficit continue to be the main challenges ahead. In the face of these challenges, AK Party started to follow a developmentalist discourse. Turkey's transition to the status of a developmental state requires a comprehensive industrial, technological strategy so that different policy areas are in coordination with one another. For this purpose, public organizations need to improve their organizational capabilities and their communications with the real sector.