Economist Prof. Dr. Election assessment from Acemoğlu: This is a big threat

Massachusetts Institute of Technology (MIT) faculty member, economist Prof. Dr. Daron Acemoğlu evaluated the results of the second round of the presidential election in his post on his Twitter account.

Stating that the Presidential Government System has weakened the parliament’s power, Acemoğlu said, “It’s not great news for Turkish democracy, but how bad things will depend on a few factors. Let’s distinguish the five aspects of democracy. First, the independence of the judiciary was very bad, and it probably couldn’t get any worse than that. Second, “The imperial presidency brought by Erdogan and the imprisonment of politicians weakened the legislature, which is the other pillar of the separation of powers. There may be further disabling of the parliament because the AKP now has fewer seats. This is a great threat.”

Daron Acemoğlu said that the pressure on the media may increase, according to the conversation on the Wall, and continued as follows:

“Third, the freedom of television and print media was already pretty bad, and the situation could get a little worse if there are controls on social media. A complete ban of all dissident voices would be a significant hardening which is unlikely. Fourth, the autonomy and impartiality of the bureaucracy and security services could be further eroded. “Another major concern for the control of corruption and other irregularities. Fifth, before the AKP rule, civil society in Turkey and freedom of expression in the broader sense was weak and suffered even more. This can continue, and that is my biggest concern.”


Stating that there is a lot of uncertainty in the field of economy, Acemoğlu’s evaluations are as follows:

“There is a lot of uncertainty for the economy. In the short term, some outsiders may see Erdogan’s victory as good for stability. But the continuation of current policies worries all parties. A policy of negative real interest rates, agencies not being completely independent, and wider mismanagement will have increasing costs. This can be seen in the summary of the Central Bank’s reserves.”


“The bigger threat is the consolidation of three major existing problems: productivity growth and lack of productivity improvements; worsening financial situation with corporate and financial balance sheets. All three are very costly. Without adequate investment or technological and efficiency improvements, the construction industry is driven by credit expansion and government spending. Directed economic growth would be of poor quality. Corruption and patronage make things worse.”


“Corporate balance sheets have deteriorated, but it is impossible to know how bad they are. This is due to both the Covid-19 economy and the pressure of the government not to lay off workers. Real estate exposure may have made things worse. Banks and especially state banks, partly because of corporate balance sheet problems and partly because of He probably has a lot of non-performing loans because they’ve been pressured not to stop lending.”


“Government spending has increased, and there are huge implicit guarantees through currency-protected lira deposits (implemented to stem the lira’s decline), various private-public programs that promise future revenues, and the balance sheets of state banks. All this comes down to the financial and economic costs of the mega-destruction caused by the earthquake and it is made worse by the rebuilding that this entails (plus the ongoing refugee problem).

On the current track, all of this will likely get worse, and certainly not better. Tourism revenues and money reserves from the Gulf and perhaps Russia may support for a while, but there is a lot of uncertainty ahead.”

Leave a Comment