The Management of household indebtedness: changing forms of state intervention in Turkey in the post-2001 period

Kahraman, Erse
This thesis examines the process of state intervention in consumer credit markets in Turkey in the post-2001 period. The larger parts of the population have gained access to financial markets over recent decades in capitalist societies. One aspect of this change has been rapid growth of consumer credit markets and concurrent rise in household indebtedness. The dominant approaches in the literature on household debt have mainly drawn their frameworks from the experiences of the advanced capitalist economies, and also largely overlook the role of state state actions in shaping the processes of financialisation. By contrast, the emergent literature on financialisation in developing countries acknowledges the role states have played through the processes of financial deepening, and associates this state involvement with the dependent form of financialisation observed in those economies. This study critically engages with the theoretical accounts in both literatures, and argues that they both fall short of offering a proper framework to analyse the concrete processes of the Turkish state’s increasing involvement in consumer credit markets, as these markets have developed in a rapid pace throughout the 2000s. Having derived methodological tools and insights from Samuel Knafo’s discussion on liberal financial governance, it traces the legal regulations, policies, and strategies towards consumer credit markets in the period 2001-2016 and tries to understand these different forms of state intervention in relation to dynamic relation between state and market actors. Within this framework, this thesis argues that the Turkish state’s interventions in the consumer credit markets have been shaped on the bases of its concerns for reinforcing the finance-led growth regime and containing the political and economic risks associated with the debt-driven growth. Based on these two contending objectives, the Turkish state’s main orientation throughout this period has been to promote the expansion of consumer credit markets, while also attempting to give a more controlled direction to the market growth.