Navigating Financial Cycles: Economic Growth, Bureaucratic Autonomy, and Regulatory Governance in Emerging Markets

Coban, Mehmet Kerem; Apaydin, Fulya

Abstract

Political decisions over economic growth policies influence the degree of bureaucratic autonomy and regulatory governance dynamics. Yet, our understanding of these processes in the Global South is somewhat limited. The article studies the post-Global Financial Crisis period and relies on elite interviews and secondary sources from Turkey. It problematizes how an economic growth model dependent on foreign capital inflows, which are contingent on global financial cycles, influences the trajectory of bureaucratic autonomy. Specifically, we argue that dependence on foreign capital flows for economic growth creates an unstable macroeconomic policy environment: while the expansionary episode of the global financial cycle masks conflicts between the incumbent and bureaucracy, the contractionary episode threatens the political survival of the incumbent. In the case of Turkey, this has incentivized the ruling coalition to resort to executive aggrandizement to control monetary policy and banking regulation, which resulted in a dramatic decay of the autonomy of the regulatory agencies since 2013.

Citation

Coban, M. K., & Apaydin, F. (2025). Navigating Financial Cycles: Economic Growth, Bureaucratic Autonomy, and Regulatory Governance in Emerging Markets. Regulation and Governance, 19(1), 126-145. https://doi.org/10.1111/rego.12621

• Journal Article Type: Article
• Acceptance Date: Aug 2, 2024
• Online Publication Date: Aug 18, 2024
• Publication Date: Jan 1, 2025
• Deposit Date: Aug 19, 2024
• Publicly Available Date: Aug 19, 2024
• Journal: Regulation and Governance
• Print ISSN: 1748-5983
• Electronic ISSN: 1748-5991
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 19
• Issue: 1
• Pages: 126-145
• DOI: https://doi.org/10.1111/rego.12621
• Keywords: Growth models, growth coalitions, bureaucratic autonomy, regulatory governance, credit-led growth model
• Publisher URL: https://onlinelibrary.wiley.com/doi/10.1111/rego.12621