An Unsteady Colossus Astride the Bosphorus 89 ... - Legatum Institute

THE LEGATUM INSTITUTEINSTANBUL OLIVE STALLdinosmichail / Shutterstock.comTHE COLD WAR LEGACY ANDTURKISH REPUBLICAN NATIONALISMThe Cold War allowed Turkey’s centre-Right to justify cronycapitalism and political repression as means of coping with thegeopolitical risks of communism. By the same logic, macroeconomicmismanagement was chalked up to the exigencies of protecting thehomeland against external threats. The republican establishmentwas illiberal both in political and economic terms. Oddly—or notso oddly in light of who benefited—credit repression and politicalrepression went hand-in-hand.Access to loans from abroad limited the government’sdependence on stable domestic prices and orderly capitalmarkets, and thus reduced the ability of institutions to holdleaders accountable for fiscal excesses—in contemporaryparlance, the “bond market vigilantes” were toothless.The Cold Warallowed Turkey’scentre-Right to justifycrony capitalism andpolitical repression asmeans of coping withthe geopolitical risksof communism.www.prosperity.com7