Power of Capital

Chapter 4Submerging Markets? Corruption and Autocracy: Romania's Unexpected Rise and the Role of Capital Markets

Not so long ago, Romania was being crushed by corruption, and just next door, Turkey was a rising star.

Turkey's eminence stemmed from its long‐standing base in democratic principle. Formerly the heart of the Ottoman Empire, it experienced a secular revolution in 1922 that was so extreme, people who refused to abandon the Turkish alphabet for the more Western‐friendly Roman one were put to death. Backed by idiomatic “young Turks,” Mustafa Kemal Atatürk had a vision of Turkey as a modern, European country, and that included cultural, political, and economic reforms, including banning the wearing of the veil and other symbols of religious affiliation. He afforded rights to women, including full universal suffrage in 1934, and provided free primary education for all Turks. Although with brutal methods, Atatürk united Turkey and propelled it into the modern world.

During the first decade of this century, the country reached a pinnacle of growth under newly elected President Recep Tayyip Erdoğan. As his grasp on power has tightened, however, Turkey has been increasingly plagued by corruption. Ever since his 2014 reelection, there's been an ominous, authoritarian tone to communications by the state. Elections appear to be rigged; dissenting parties have been banned. Censorship of the press and social media is on the rise. Political opponents and journalists—guilty or not—have ...