This chapter analyses macroeconomic policy, with a focus on monetary policy, relating it to the performance of the economy in Turkey in the Great Depression. The Depression was transmitted to Turkey primarily through a sharp decline in agricultural commodity prices. In response, the government adopted strongly protectionist measures starting in 1929 and pursued import-substituting industrialization. In contrast, Turkey’s macroeconomic policy was cautious. Fiscal policy adhered to the principle of balanced budgets. The policies of the new central bank, established in 1930, were similarly restrained: as a result, the monetary base increased very little before 1938. While this restraint resulted in some appreciation of the currency, Turkey’s economy did better than most others around the Eastern Mediterranean. The chapter argues this performance was primarily due to strong protectionism, which paid benefits in the short run, and recovery in the agricultural sector.

There were two very different conjunctures for the Ottoman economy during the eighteenth century. The decades until the end of the 1760s were a period of relative peace and economic expansion. In contrast, from the end of the 1760s until the 1820s was a period of wars and domestic political struggles when long-distance trade as well as agricultural and manufacturing output were frequently disrupted, state finances came under pressure and the frequent debasements led to inflation. Even though trade and more generally economic interaction between the Ottoman Empire and western Europe increased during the eighteenth century, its volume remained small. As a result, both urban and rural crafts and manufacturing activities in the Ottoman Empire remained mostly intact. The nineteenth century was a period quite different from the earlier era. It was characterized, on the one hand, by major efforts of Western-style reform in administration, education, law, and justice, as well as economic, fiscal, and monetary affairs. It was also a period of integration into world markets and rapid expansion in trade with industrial Europe that transformed the Ottoman economy into an exporter of primary products and importer of manufactures.

In order to better understand Turkey’s struggles for democratization and descent into authoritarianism since 1980, we examined, in earlier chapters, how Islamists contested the secular nature of the Turkish state before they came to power, and how Kurds challenged the ethnic nationalism of the Turkish state. Another challenge to Turkey’s democracy came from women who criticized the illiberal nature of civil rights in the country and demanded the expansion of their rights as women.

This chapter examines the women’s movement in the context of democratization, globalization, and evolving authoritarianism in Turkey. The women’s movement that emerged in the early 1980s and flourished through the participation of different groups was important as a democratizing force. Women who voiced demands for rights in the political arena introduced new issues and perspectives that expanded the borders of the political and accelerated the inclusion of more women in politics.

This chapter examines Turkey’s foreign relations and the role of global and domestic developments in their evolution since 1980. In the bipolar world of the Cold War era, Turkey was part of the West, and its foreign policy focused mostly if not exclusively on security issues. After the end of the Cold War and the transition to a globalizing world order, security issues continued to be important. However, domestic politics, particularly changes in Turkey’s political regime and the decline in democracy, international politics in Turkey’s neighborhood, economics, and other concerns began to play greater roles in shaping foreign policy. This new world presented more opportunities and also more risks for Turkey.

Due to its strategic location, Turkey could not stay out of the rivalry between the United States and the Soviet Union and remain neutral during the Cold War. It did not have sufficient economic, military, and technological resources to protect itself if it chose neutrality.

This chapter examines the AKP’s rise to power and the decline of democracy during its rule. Even though it was a new party, the AKP had been preparing to win elections from within the Islamic movement for a number of years. The weaknesses of the secular elites ultimately precipitated its ascent to power. During the unstable coalition years of the 1990s, followed by the severe economic crisis in 2001, secular elites, including those in the military, politics, and the judiciary, attempted to repress the Islamist opposition. This had a boomerang effect that resulted in the empowerment of the AKP in a context of seemingly hegemonic secularism. The party came to power through democratic elections in 2002, with the promise of democratizing the polity, expanding freedoms for all, and pursuing Western-oriented goals of Republican modernization.

This chapter examines economic development and the interaction between the economy and politics in Turkey since 1980. Just as the military coup ushered in a new era in Turkey’s politics, a new era for the economy began with the launch of neoliberal or more market-oriented policies in the same year. Global forces and institutions played important roles in shaping Turkey’s new economic policies. The most important policy changes were trade liberalization, the emphasis on exports of manufactures, the lifting of restrictions on global capital flows, and the privatization of state economic enterprises. The signing of the Customs Union agreement with the European Union in 1994 provided further support for exports of manufactures. Turkey had experienced moderately high rates of increase in per capita income since 1980. Rapid urbanization and the shift of the labor force from lower-productivity agriculture to the urban economy, discussed in Chapter 2, also contributed to economic growth.

One of the biggest challenges to democratizationin Turkey has been the failure of the state to recognize the ethnic and civil rights of Kurds as equal citizens. The Kurds began an armed revolt in 1984, which exposed the Kurdish problem as the Achilles heel of the nation-state project of the founding fathers. The insurrection dismantled the myth of the ethnically Turkish nation-state, while providing an opportunity for cultivating a more inclusive democracy where ethnic differences could be accepted as building blocks of a more diverse nation-state. Since the early 1980s the Kurds have become politically more powerful, and the Turkish state has come to recognize the Kurdish reality, which it had long denied. A democratic solution to the conflict, however, is still missing.

On the Kurdish side, the goals of the armed revolt and of Kurdish civilian politics evolved over time.

One way to begin to understand the social, political, and economic changes in Turkey since 1980 is to focus on the rapid urbanization process. As in many other developing countries, Turkey’s population increased rapidly after World War II, and rural-to-urban migration gained momentum. Even though the population growth rate slowed after 1980, rapid urbanization continued. As a result, the share in the total population of those living in urban centers of more than ten thousand people increased from around 18 percent in 1950 to 45 percent in 1980, and to about 80 percent in 2015. Close to two-thirds of the country’s population in 2015 were either the children or grandchildren of migrants to urban areas or migrants themselves. We will argue in this chapter that the migration of tens of millions of people from rural to urban areas put great pressure on Turkey’s emerging democracy and created an opening for the Islamist parties.

This chapter examines politics in Turkey during the two decades following the 1980 military coup. These two decades are important because they set the framework within which the secular elites yielded power to the Islamic-rooted elites after the turn of the century. We argue that the choices secular elites made in the decades after the military coup precipitated their own demise and set the stage for the rise of an alternative Islamic elite. The attempt by the military to engineer a docile society ruled by a strong state backfired. During these years Islamists, Kurds, and women made challenging demands for democratization. Even though the generals aimed to create a tabula rasa in the political realm, banning all the existing political parties for some time and controlling the formation of new parties, the new political regime merely led to the fragmentation of the party system and the gradual decline of secular parties.

The year 1980 was a critical turning point for Turkey. It was marked by a violent military coup that followed a decade of political instability, economic deterioration, and civil strife between nationalist and leftist groups. The military sought to reinstate political and economic stability under its authoritarian supervision. However, the coup had far-reaching, unintended consequences beyond the generals’ immediate goals. Turkey experienced a radical transformation between 1980 and 2017, when a slim majority voted in favor of what was effectively a one-man authoritarian regime in a controversial referendum. This book examines the dramatic changes that took place in Turkey during this period.

Between 1980 and 1983, when the civilians came back to power, the generals brought the turmoil on the streets under control and continued with the policies of global economic integration that the pre-coup government had initiated.