Institutional Structures

Institutional Structure of Turkey

At a first glance, Turkey has a diversified economy, excellent infrastructure, and a legal and social structure of a developing nation. Proximity to Europe, integration with European markets, the external anchor of the European Union accession, and a lengthy track record of solid economic management and structural reform are the drivers of Turkey’s long-run prospects (World Bank, 2010). Turkey’s high degree of integration with the world economy, through both trade and financial channels, resulted in the country becoming vulnerable to the impact of the global recession, with the economy contracting by 4.7% in 2009. That being said, the economy has now recovered to pre-crisis levels with growth reaching 7% in 2010, shown to be a larger growth than almost all European counterparts. Despite the economic and political expansion in the last 10 years, Turkey’s battle with corruption, unemployment, income inequalities, and the Kurdish problem have been risk factors for any business that considers investing. According to corruption rankings, Turkey was ranked below South Africa, and tied for a spot with Cuba (Transparency International, 2010).
Sociopolitical Structure
Turkey is a parliamentary democracy with a free market economy. Since legal reforms instituted in 1926, Turkey's judicial system has been based on the Swiss Civil Code, the Italian Penal Code, and the Neuchâtel (Swiss) Code of Civil Procedure. The 1982 Constitution guarantees judicial independence, and prohibits any government agency or individual from interfering with the operations of the courts and judges (Country Studies, 2010). The presence and the systematic implementation of these laws create an open path for Foreign Direct Investments; the intellectual property rights are also in favor of the proprietor. Despite a volatile past that