Turkey’s economic future is not only threatened by inflation, rising emissions and low female workforce participation, but also, and perhaps most critically, by a growing crisis of corruption and declining institutional integrity, according to a Paris-based intergovernmental organization that promotes economic growth, stability and improved living standards in the world.
The Organization for Economic Cooperation and Development (OECD)’s 2025 Economic Survey of Turkey offers a scathing critique of the country’s worsening governance, pointing out systemic weaknesses that extend beyond monetary and fiscal issues. At the heart of these problems is a political system deliberately paralyzed by the Islamist government of President Recep Tayyip Erdogan.
The report singles out the worsening perception of corruption in Turkey as a critical issue. According to Transparency International’s Corruption Perceptions Index, Turkey now ranks 115th out of 180 countries , marking one of its worst positions in over a decade.
This slide places Turkey well behind not only other OECD countries but also several emerging economies with lower GDP per capita. The OECD warns that this downward spiral in governance integrity is eroding investor confidence, weakening the rule of law and threatening social cohesion.
One of the core concerns expressed in the OECD report is the lack of an independent anti-corruption agency in Turkey. Although various public institutions are tasked with monitoring integrity and ethical conduct, these bodies are perceived to lack both autonomy and enforcement power.
Investigations into high-profile corruption cases are rare, and when they do occur, they tend to be limited in scope and heavily politicized. The absence of an institutional firewall between executive authority and oversight mechanisms allows conflicts of interest and misuse of public funds to go unchecked.
Since 2013, when Erdogan derailed multi-billion dollar corruption investigations implicating him, his family and his business and political associates, Turkey has seen no substantial corruption probes — especially those involving members of President Erdogan’s inner circle. This followed the purge of police chiefs, prosecutors and judges involved in the case.
In parallel, public procurement processes – which account for a significant share of government spending – remain opaque. The report notes that Turkey has not adopted adequate safeguards to ensure transparency and competition in awarding contracts.
Several exceptions are embedded into procurement law, allowing ministries and municipalities to bypass competitive bidding under broad discretionary justifications, such as “national interest” or “urgency.” This has created a breeding ground for clientelism and patronage networks, particularly at the local level.
Public procurement has become a key avenue for the enrichment of President Erdogan and his associates, who have become accustomed to receiving kickbacks through various schemes in exchange for securing public contracts, often through non-competitive processes.
Companies and businesspeople closely linked to the Erdogan government not only receive favorable treatment in securing public contracts but also have their back tax debts erased with a stroke of the pen by President Erdogan and his deputies.
Concerns extend beyond corruption in procurement. The OECD highlights that political influence over regulatory bodies has distorted policymaking and contributed to an unpredictable business environment.
For instance, the allocation of public resources – such as licenses, land, and tax incentives – is often seen as benefiting politically connected firms, while independent companies face bureaucratic hurdles and regulatory harassment. These patterns of favoritism not only suppress fair competition; they also deter foreign direct investment and technological innovation.
The Erdogan government has become notorious for using regulatory bodies and partisan administrative agencies to target businesses and individuals deemed disloyal. These same mechanisms, however, are employed to favor the cronies of President Erdogan.
Turkey’s weakened judiciary also contributes to this fragile institutional landscape, according to the OECD survey. Although nominally independent, the judicial system has increasingly come under the sway of the executive branch.
Turkey’s weakened judiciary also contributes to this fragile institutional landscape, according to the OECD survey. Although nominally independent, the judicial system has increasingly come under the sway of the executive branch.
Critics, including international observers, point to the erosion of judicial impartiality and the growing use of courts to silence dissent, intimidate journalists and obstruct anti-corruption probes. The OECD notes that this “undermines legal certainty, weakens property rights, and discourages long-term investment.”
Moreover, public trust in state institutions is declining sharply. Citizens report limited confidence that authorities are accountable or responsive to allegations of wrongdoing. Whistleblower protections are minimal, and civil society organizations working on transparency and human rights face growing restrictions, including regulatory barriers and intimidation campaigns.
These governance failures come at a steep cost. Corruption inflates public spending, distorts policy priorities and reinforces inequality. Public funds that could be allocated to education, healthcare or climate adaptation are instead diverted to inefficient or politically motivated projects. According to the OECD, “addressing corruption and restoring public sector integrity are not optional – they are preconditions for economic resilience.”
As a result the OECD is calling for Turkey to urgently establish a permanent, fully independent anti-corruption body, equipped with investigative and prosecutorial powers and shielded from political interference. It also urges reforms in public procurement, greater transparency in political financing and robust protections for whistleblowers and investigative journalists.
These recommendations are certain to fall on deaf ears in Ankara, as crony capitalism and corrupt politics have become deeply entrenched in the country’s governance. With no strong or viable political opposition capable of challenging this system or offering voters an alternative government, meaningful change seems unlikely anytime soon.
Without swift and credible action, the OECD warns, Turkey risks being caught in a vicious cycle: weak institutions fueling corruption – corruption eroding trust – and mistrust sabotaging growth. Economic stabilisation, fiscal consolidation and digital transformation are unlikely to succeed unless the governance crisis is addressed at its root.
The fact that the Erdogan government, at the heart of this deeply corrupt system, is both unwilling and unable to lead Turkey toward meaningful reform means the country will continue to suffer from entrenched governance dysfunction, with serious instability looming on the horizon.
