A Critical Review of Public Borrowing by Turkish Municipalities: 1960-2006

This paper offers an analysis of municipal borrowing in Turkey during 1960-2006 in two sub-periods: 1960-79 and 1980-2006. These sub-periods are distinguished from each other as different regimes of capital accumulation, taking 1980 as the breaking point. In this framework, the capital accumulation model of the import substitution era of 1960-79 is assessed in the context of the national developmental state, while the financial capital accumulation regime in the post-1980 period is studied in the context of financial globalisation. The impacts of these two regimes on the debt structures of municipalities are compared using period-specific indices of indebtedness. It is found that indebtedness in real terms increased significantly in the post-1980 sub-period, which can be attributed to the adoption of the financial capital accumulation regime.