How can a seemingly weak state in the financial services industry act strong? The role of organizational policy capacity in monetary and macroprudential policy

It is widely held in the public policy and political economy literatures that the Turkish state is weak and cannot adopt a proactive approach in the financial services industry by steering and coordinating the financial policy network. However, it is puzzling that this seemingly “weak” Turkish state...

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Bibliographic Details
Published in:New perspectives on Turkey 2019-11, Vol.61, p.71-96
Main Authors: Bakır, Caner, Çoban, Mehmet Kerem
Format: Article
Language:English
Subjects:
Banking
Bureaucracy
Central banks
Coordination
Currency
Developing countries
Financial services
International finance
LDCs
Monetary policy
Money
Organizational policy
Policy networks
Political economy
Production capacity
Public finance
Public policy
Reserve requirements
Segmentation
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Summary:It is widely held in the public policy and political economy literatures that the Turkish state is weak and cannot adopt a proactive approach in the financial services industry by steering and coordinating the financial policy network. However, it is puzzling that this seemingly “weak” Turkish state, which is often marked by fragmentation, conflict, and a lack of policy coordination within the state apparatus, acted strongly between 2010 and 2016 by taking pre-emptive measures to contain the macrofinancial risks arising from hot money inflows and bank credit expansion. Examining the organizational policy capacity of the Central Bank of the Republic of Turkey, this article argues that proactive policy design and implementation are more likely to complement state capacity when the principal bureaucratic actors have strong organizational policy capacities.
ISSN:0896-6346
1305-3299
DOI:10.1017/npt.2019.16