For nearly six months, one of the world’s top economies has been gripped by crisis, sparking fears of wider financial contagion. Since the spring, the Turkish currency has cratered while inflation has soared, rattling other emerging markets from Argentina to Indonesia. Yet the most important warning to draw from Turkey’s recent convulsions is less economic than political: namely, the danger of betting on strongman rule.
In truth, worries about Turkey melting down the global economy are misplaced. Unlike during the Asian financial crisis in the late 1990s, when the collapse of the Thai currency unleashed regional upheaval, Turkey’s problems are less an indicator of systemic weakness across developing economies than the outgrowth of factors that are specific to Ankara. These include a politicized monetary policy, the highest current account deficit among the G20 developing economies, the most foreign-denominated private-sector debt of any emerging market, and a gratuitous fight with Washington that has escalated into sanctions.
Yet while the risk of financial spillover from Turkey has generated a storm of headlines, it is the proliferation of the political model at the root of Ankara’s troubles that is the bigger danger. In fact, in its governance, Turkey under President Recep Tayyip Erdoğan has been at the leading edge of a global trend. Just as a wave of democratization swept the planet beginning in the mid-1970s—overturning dictatorships from Portugal to South Korea and, eventually, the Soviet empire—the past 15 years have witnessed a rising tide of strongman regimes worldwide.