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How can a seemingly weak state in the financial services industry act strong? The role of organizational policy capacity in monetary and macroprudential policy

Published online by Cambridge University Press:  31 October 2019

Caner Bakır
Department of International Relations, College of Administrative Sciences and Economics, and GLODEM, Koç University, Rumelifeneri Yolu, 34450, İstanbul;
Mehmet Kerem Çoban
GLODEM, Koç University, Rumelifeneri Yolu, 34450, İstanbul;


It is widely held in the public policy and political economy literatures that the Turkish state is weak and cannot adopt a proactive approach in the financial services industry by steering and coordinating the financial policy network. However, it is puzzling that this seemingly “weak” Turkish state, which is often marked by fragmentation, conflict, and a lack of policy coordination within the state apparatus, acted strongly between 2010 and 2016 by taking pre-emptive measures to contain the macrofinancial risks arising from hot money inflows and bank credit expansion. Examining the organizational policy capacity of the Central Bank of the Republic of Turkey, this article argues that proactive policy design and implementation are more likely to complement state capacity when the principal bureaucratic actors have strong organizational policy capacities.

© New Perspectives on Turkey and Cambridge University Press 2019 

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Authors’ Note: We are very grateful to Sinan Akgünay for his comments and suggestions on earlier versions of this article. We thank the interviewed officials for their openness in their responses. An earlier version of this article was presented at the 25th IPSA World Congress of Political Science, held in Brisbane, Australia on July 21–25, 2018, and we thank panel participants for their constructive comments. We also very much appreciate the constructive comments of three anonymous referees and the editors of the journal. Mehmet Kerem Çoban would like to gratefully acknowledge the generous financial support of the Academic Support Fund of the Lee Kuan Yew School of Public Policy, National University of Singapore.


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