The Impact of Turkey's Current Corruption Crisis on ITS Economy

Corruption is one of the main problems of the Turkish economy and society. It played an important part in all economic crises since civil governments came into power again after the third, last putsch in 1980. But in opposite to all the economic crises before, the current one is almost exclusively based on corruption. On December 17, 2013 Turkey's officials and the public were shocked by surprise, when the first arrests took place. Later on, even the prime minister seemed to be involved, as on 24 February, 2014 voice recordings of him are circulated in the internet in which he orders his son to dispose large sums of cash. As the ongoing crisis is caused predominantly by one factor, corruption, it will be interesting to see, how this factor can directly influence the economic situation of a country. The paper, therefore, will investigate how the sudden discovery of corruption in December 2013 impacted Turkey's economy, particularly foreign direct investment and forced the immediate restructuring of the political economy in order to rebuild lost trust.