Policy transfer, external actors and policy conditionality: public financial management reform in Turkey

Abstract

Turkey’s economic turmoil of today is reminiscent of an earlier era, during which instability, high inflation, and financial mismanagement ruled the day. Yet until recently, Turkey was celebrated as an economic success story, enjoying rising prosperity, high GDP growth, and a healthy fiscal outlook. How was that success possible? Which mechanisms allowed for successful policy reform and how did internal reform dynamics interact with exogenous factors? This article examines the effects of EU and IFI policy conditionality on Turkey, arguing that EU-induced conditionality is more effective compared to IFI conditionality. Further, this work demonstrates the formation of a domestic epistemic community, which evolved into an advocacy coalition and became a crucial pillar for policy reform. Finally, shrewd policy entrepreneurs used a favorable window of opportunity and aligned with the reformist coalition to overcome barriers to policy change.