Turkey, adaptability
The 2001 stabilisation, and its unwinding
Turkey answered its 2001 banking collapse with central bank independence, bank restructuring and fiscal rule, taking inflation from 54.4 percent in 2001 to 8.6 percent in 2004, and after 2018 the same framework was overridden until inflation reached 72.3 percent in 2022.
72.3 % per year, consumer price inflation after the framework was overridden, 2022. 8.6 % per year, consumer price inflation at the stabilisation's best, 2004. World Bank, World Development Indicators, series FP.CPI.TOTL.ZG, retrieved 2026-08-27.
The move, and what it needed
A crisis government handed monetary policy to an independent central bank by law, recapitalised and closed broken banks through an autonomous agency, and held a primary surplus, which together made the anti-inflation promise credible for fifteen years.
Preconditions
- A crisis deep enough to make the political cost of reform payable
- External anchors, the IMF programme and EU accession prospect, that rewarded holding the framework
- A technocratic team with authority to execute across ministries
Where it travelled: The package was the standard post-crisis prescription and worked as designed. What the case adds is the second half: formal independence survived on paper while governors were replaced until policy followed the executive, a path other countries have since repeated.
Limits: Inflation is an outcome with many causes: the 2001-2004 fall also rode an IMF programme and a global disinflation, and the post-2018 rise includes a currency crisis and imported energy prices, so neither number isolates the institutions. The record runs both ways by design: the same state that built a working stabilisation framework later demonstrated that the framework had no defence against its own executive. The institutions were not abolished, which is why the status is eroded rather than dismantled.
This record describes what Turkey delivered. It is linked to Institutional responsiveness because no comparable dataset measures that capability. It does not affect the score or confidence.
The same gap elsewhere
5 deliveries linked to Institutional responsiveness in other countries.
Plano Real, the 1994 currency stabilisation
Brazil ended four decades of high inflation with a staged currency reform, taking annual consumer price inflation from 2,075.9 percent in 1994 to 3.2 percent in 1998.
Proalcool, the fuel substitution after the oil shock
Brazil answered the 1973 oil shock by mandating ethanol blending and building a national fuel alcohol industry, taking production from 580 thousand cubic metres in 1975 to 38,199 in 2025, and from 2003 flex-fuel engines moved the choice to the driver.
The Convertibility Plan, and its collapse
Argentina ended hyperinflation by fixing the peso to the dollar by law in April 1991, taking annual inflation from 4,923 percent in 1989 to 3.9 percent in 1994, and the regime held until it collapsed in the 2001-2002 crisis.
Kurzarbeit in the 2008-2009 crisis
Germany answered the 2008-2009 collapse in manufacturing orders by paying firms to cut hours instead of jobs, and short-time work covered 1.44 million workers at the May 2009 peak, about 5 percent of insured employment, while unemployment barely rose.
Telebras, the telecom system that was dismantled
Created in 1972, Telebras coordinated Brazil's state telecom system until its 1998 privatisation, when 54 concessionaires were split out and the state moved from operating the network to regulating and universalising service.