February 2001 Crisis in Turkey: Causes and Consequences [with Comments]

Turkey has suffered several economic crises since 1990. However, the latest crisis of February 2001 was unprecedented in intensity. In the main, this crisis was more internally than externally induced. Although the financial crisis turned out to be the immediate cause, it actually was the result of combined effects of diverse factors like corruption, waste, lack of good governance and transparency, excessive government intervention, inadequate legal infrastructure and, above all, the phenomenon of media-bankholding company ownership in the country. Our analysis suggests a critical need to implement rational economic policies, to downsize the state, to improve legal infrastructure, and to ban simultaneous ownership of media, bank, and holding companies to prevent recurrence of such crises in the future.