Dependent financialisation and its crisis: the case of Turkey

Although the financialisation research agenda has developed rapidly, especially since the Great Recession, there are still some gaps in the literature regarding Emerging Capitalist Countries’ (ECCs) financialisation experiences. We argue that the concept of dependent financialisation applies more appropriately to ECCs, in line with a recently burgeoning heterodox literature on ECC financialisation. More specifically, we suggest that a critical rethinking of the Dependency School’s arguments in the light of the current uneven and combined financialisation experiences of ECCs will generate a better structured theoretical framework. To support this, we take Turkey’s financialisation experience and its 2018–19 crisis as a case study. We suggest that dependent financialisation in Turkey can be grasped in terms of the emergence of an economic structure with two specific characteristics: (i) it has structurally higher interest rates and a high dollarisation rate due to Turkey’s mode of integration into the hierarchical global financial system; (ii) economic activity increasingly depends on capital inflows, which make the country’s economy vulnerable to the negative effects of the monetary policy decisions of major central banks. Finally, we argue that recurrent crises are the manifestations of the limits of dependent financialisation, which generates an unsustainable mode of integration to the global economy.