A comparative analysis of financial regulation reforms in Turkey and Poland: Evidence from the 2000s

This thesis focuses on identifying the determinants of financial regulation reforms. It investigates the reasons behind the introduction of or changes to financial regulationsby governments and other regulators, with specific reference to the financial regulations undertaken by Turkey and Poland in the 2000s. The research question is explored from a comparative political economy perspective, and the answer is arrived at by employing the most similar systems design method using two cases. This limited number facilitated an in-depth comparative analysis. The determinants that I hypothesized would have an effect on financial regulations were domestic learning, policy diffusion, global shocks, local shocks, financial development, and trade development. Both qualitative and quantitative methods were used to investigate the effects of these factors. The results are largely compatible with each other. The findings in this thesis provide evidence that these variables are effective infinancial regulation reforms, but there are significant differences in the direction of their effects. One significant difference is observed in the learning factor. Both exogenous (policy diffusion) and endogenous (domestic learning) types of learning turned out to have a negative effect on the pace of financial liberalization reforms in Turkey and Poland. The thesis finds that this difference is primarily the result of the rise in state intervention in response to financial crises that triggered concerns about financial stability. The findings further suggest that the effects of these factors vary across critical junctures and spatial and temporal dimensions.