Introduction

The dominant theme in development economics in recent years is the liberalization programmes undertaken by a number of developing countries, either unilaterally or as a part of the World Bank structural adjustment lending programmes. One such programme, which poses a number of analytical issues, is that undertaken by Turkey in 1980. Although Turkey experimented with liberalization of the economy during the 1970s, the measures she implemented then were half-hearted and spasmodic. The 1980 reform package, in contrast, was comprehensive and bold, including not only liberalization of the foreign trade regime but also widespread financial reform and macroeconomic stabilization policies. The economic consequences of the experiment continue to be a matter of debate. The new regime, which came into office in 1993, headed by Mrs Tanau Ciller, a former Professor of Economics, continues to battle with an inflation rate of 109 per cent (the latest figures for percentage change in CPI over the last twelve months), a declining lira and a sizeable public sector borrowing requirement amounting to 16 per cent of the country’s GNP. It is all too easy to lay the blame for the current economic problems at the door of the 1980 reforms, dubbed ‘the infamous package’ by certain sections of the financial press. Whether or not the current economic problems are a consequence of the reforms is arguable.