Political economy

Abstract

While there does not exist a generally accepted definition of the term, this entry takes “political economy” to refer to institutional matrices that structure the organizational relationships among economic actors in production and distribution, which are supported by domestic and international policy regimes. There is a growing consensus in the political economy literature that, first, these institutional matrices are generally taken to be nationally specific while showing similarities across diverse varieties within capitalism, broadly defined, and second, the quality (and complementarity) of these institutions determines the relative economic performance of domestic political economies (Hall and Soskice, 2001). The performance of such matrices is judged by the extent to which “they generate relatively high rates of economic growth and employment, while resolving distributive issues with a minimum of social conflict” (Hall, 2010: 3). There exists, however, no consensus in the literature on comparative political economy as to what the dimensions of these institutional matrices constitute. Domestic political economies, as conceived in this chapter, are institutional matrices comprising the production regime, the distributive regime, the policy regime, and the international regime. These regimes address, individually and collectively, the fundamental problems of demand, wages, employment, and productivity in domestic political economies. In tracing continuity and change in the Turkish political economy in the last three decades, this chapter will rely on Hall’s (2010) synthetic but analytically rigorous portrayal of political economic institutions. First, it reviews the comparative political economy literature that focuses on Turkey. Second, it traces elements of continuity and change in the institutional pillars of the Turkish political economy, looking primarily at the period since 1980, preceded by a brief discussion of the period covering the 1960s and 1970s. Finally, it discusses the ways and means through which politics and markets interact in the Turkish political economy.