Cambridge Journal of Economics 2022, 1 of 24 https://doi.org/10.1093/cje/beac006 Dependent fnancialisation and its crisis: the case of Turkey Ümit Akçay and Ali Rıza Güngen* Although the fnancialisation research agenda has developed rapidly, especially since the Great Recession, there are still some gaps in the literature regarding Emerging Capitalist Countries’ (ECCs) fnancialisation experiences. We argue that the concept of dependent fnancialisation applies more appropriately to ECCs, in line with a recently burgeoning heterodox literature on ECC fnancialisation. More specifcally, we suggest that a critical rethinking of the Dependency School’s argu- ments in the light of the current uneven and combined fnancialisation experiences of ECCs will generate a better structured theoretical framework. To support this, we take Turkey’s fnancialisation experience and its 2018–19 crisis as a case study. We suggest that dependent fnancialisation in Turkey can be grasped in terms of the emergence of an economic structure with two specifc characteristics: (i) it has structurally higher interest rates and a high dollarisation rate due to Turkey’s mode of integration into the hierarchical global fnancial system; (ii) economic activity increasingly depends on capital infows, which make the country’s economy vul- nerable to the negative effects of the monetary policy decisions of major central banks. Finally, we argue that recurrent crises are the manifestations of the limits of dependent fnancialisation, which generates an unsustainable mode of integration to the global economy. Key words: Dependent fnancialisation, Financial crises, Turkey JEL Codes: E44; E52; E6; F31; G01 1. Introduction Turkey’s economy went into recession in 2018 amidst global fnancial tightening. The Turkish Lira (TL) collapsed, losing 31 per cent of its value against the US Dollar (USD) in the same year. A sharp interest rate hike in September 2018 was followed by a bankruptcy wave that has drowned hundreds of frms while the offcial © The Author(s) 2022. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved. Manuscript received 5 October 2019; fnal version received 2 January 2022. Address for correspondence: Ümit Akçay, Berlin School of Economics and Law, Badensche Str. 52, 10825, HWR Berlin, Germany; email: uemit.akcay@hwr-berlin.de *Berlin School of Economics and Law (ÜA); York University, Toronto (ARG). We thank the editor and the two anonymous referees of the Cambridge Journal of Economics for their valuable comments and suggestions. We also appreciate the comments of Joachim Becker, Annina Kaltenbrunner, Elif Karaçimen, and Özgür Orhangazi on the earlier versions of this paper. Any remaining errors are of the authors’ responsibility. Downloaded from https://academic.oup.com/cje/advance-article/doi/10.1093/cje/beac006/6554722 by York University Libraries user on 28 March 2022