This essay jointly won third prize in the first annual Sakip Sabanci International Research Award essay competition. This year's topic was "Turkey's New Geopolitical Environment: Policy Challenges and Opportunities for Engagement". The competition is jointly administered by Sabanci University and the Brookings Institution.

Some studies suggest that market-based economic development with state policies based on the rule of law are essential in stabilizing democracy and protecting civil and political rights. This article explores a possible association between weak civil and political rights, democratic instability and the delay in a state-regulated market development under the rule of law in Turkey. Despite its experience with democratic institutions since the 1950s, Turkey can be characterized as an 'illiberal' democracy because of its poor record on human rights. The lack of a relatively autonomous and competitive market economy may be explained by clientelist and inegalitarian forms of state intervention. These in turn contribute to the perpetuation of low income levels, a clientelist rent-seeking political and economic culture and unstable and illiberal democracy.