How should a state-led developing country manage the transition to a market-driven economy? What are the prerequisite financial market reforms? How can local institutions facilitate or hinder the process? Combining economic theory, international evidence and an in-depth study of the case of Turkey, this book provides informed answers to these challenging questions. Additionally, it provides a framework for explaining divergence from desired outcomes.

The book begins by tracing the roots of Turkey's traditionally unstable economic performance. A pattern emerges of weak institutions...