Policy analysis and capacity in the Central Bank of Turkey

Abstract

This chapter examines policy capacity and policy analysis in the context of the Central Bank’s role in policy design and implementation that relates to macroeconomic and financial stability in Turkey. Specifically, it focuses on agency-level (i.e. individual and organisational) complementarities that relate to the Bank’s policy capacity. These are related to the Bank’s knowledge and expertise, human capital, recruitment, and career development prospects, its ability to collect and analyse data, its formal organisation and departments related to policy analysis, its organisational culture emphasising measured risk taking in policy design and implementation (see also Bakir, 2007, 2012a) and its policy entrepreneurship linking its bureaucratic agenda with governmental agenda due mainly to its strong analytical, operational and political capacity. This chapter argues that proactive behaviour in monetary policy design and implementation is most likely when a central bank has strong analytical, operational and political policy capacity.