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The Emergence of the Regulatory State: The Political Economy of Turkish Banking Reforms in the Age of Post-Washington Consensus

Author

Listed:
  • Caner Bakir

    () (Koc University)

  • Ziya Onis

Abstract

The new era of Post-Washington Consensus (PWC) promoted under the auspices of multilateral organizations such as IMF and the World Bank centres on the need to develop strong regulatory institutions, especially the realm of banking and finance in developing countries. By focusing on the Turkish experience in the aftermath of the 2001 crisis, the article identifies the positive features of the new era the PWC in terms of the banking sector which as a result has become much more robust in terms of its ability to withstand external shocks and to avert future financial crises. At the same time, however, the article highlights some of the limitations of the new era. Important limitations are identified in terms of the distributional impact of the regulatory reforms with the banking sector and notably the foreign banks emerging as the major beneficiaries of this process. Additional limitations are observed in the areas of consumer protection and competition regulation. These weaknesses, in turn, highlight the limits of the emerging regulatory state in the era of the PWC. Similarly, significant weaknesses are evident in terms of the ability of the banking system to finance the real economy, and notably the small and medium sized businesses.

Suggested Citation

  • Caner Bakir & Ziya Onis, 2009. "The Emergence of the Regulatory State: The Political Economy of Turkish Banking Reforms in the Age of Post-Washington Consensus," Koç University-TUSIAD Economic Research Forum Working Papers 0905, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:0905
    as

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    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_0905.pdf
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    References listed on IDEAS

    as
    1. Ziya Önis & Fikret Senses, 2007. "Global Dynamics, Domestic Coalitions and a Reactive State: Major Policy Shifts in Post-War Turkish Economic Development," ERC Working Papers 0706, ERC - Economic Research Center, Middle East Technical University, revised Sep 2007.
    2. Aysan, Ahmet Faruk & Lerzan, Yildiz, 2006. "The Regulation of the Credit Card Market in Turkey," MPRA Paper 5490, University Library of Munich, Germany.
    3. Majone, Giandomenico, 1997. "From the Positive to the Regulatory State: Causes and Consequences of Changes in the Mode of Governance," Journal of Public Policy, Cambridge University Press, vol. 17(02), pages 139-167, May.
    4. Ziya Onis & Fikret Senses, 2007. "Global Dynamics, Domestic Coalitions and a Reactive State: Major Policy Shifts in Post-War Turkish Economic Development," Working Papers 2007/7, Turkish Economic Association.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Regulatory state; post-Washington consensus; banking; Turkey;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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