A tightrope walker balancing medicine and money, representing Turkey's economic policy.

Turkey's Economic Tightrope: Balancing Populism and Neoliberalism in Healthcare

Lena Voss in Politics & Policy June 2025 • 4 min read.

"An in-depth look at how Turkey's AKP navigates the complexities of pharmaceutical policy, economic pressures, and political priorities."

Since November 2002, Turkey has been governed by the Justice and Development Party (AKP), a period often characterized by significant 'neoliberal restructuring.' Indeed, the early 2000s brought widespread privatization, reduced income tax rates, and flexible labor markets.

However, Turkey’s economic policies under the AKP have never fit neatly into a box. Its commitment to free market principles is regularly tempered by its conservative ideology and a strong desire to maintain support among both everyday citizens and powerful elites. This balancing act is visible in the expansion of social programs and the state’s continued role in housing.

A common thread in discussions of Turkish politics is the idea that the AKP is both neoliberal and populist. Drawing from studies of 'neoliberal populism' in Latin America, scholars have examined how the AKP combines these seemingly contradictory elements. This analysis is complex, given that 'populism' can refer to both redistribution policies and a political style centered on mass appeal and anti-establishment rhetoric.

The 2009 Healthcare Reform: A Clash of Ideologies

A tightrope walker balancing medicine and money, representing Turkey's economic policy.

In September 2009, Turkey initiated a major reform in its pharmaceutical expenditure and pricing policies. By introducing a global budget, the country saved approximately 20 billion TL in public pharmaceutical spending between 2010 and 2012. This substantial reduction was mainly achieved through stricter price controls on pharmaceutical producers and distributors—a populist solution.

This approach contrasted sharply with the alternative neoliberal solution of privatizing costs through higher out-of-pocket payments. This decision presents a puzzle, given the AKP’s usual preference for business-friendly policies. Why did the government opt for stricter controls rather than shifting costs to consumers?

Electoral Considerations: The AKP's leadership recognized the importance of public health services to their voter base. Substantially reducing access could have triggered significant political backlash.
Limited Business Influence: There was a notable absence of strong business interests advocating for high medicine prices. This reduced potential opposition to price control measures.
Lack of Industrial Policy: The government lacked a developmentalist commitment to using pharmaceutical policy as a tool for broader industrial strategy. This removed another potential argument against price controls.

The September 2009 reform marked a significant shift. Previously lenient and business-friendly pharmaceutical policies were replaced with strict, anti-business regulations almost overnight. This change created a major puzzle for those familiar with the AKP's typical approach to economic governance.

Lessons for Turkish Politics

The evidence from this particular case of pharmaceutical policy reform supports several more general conclusions regarding the political dynamics that have underpinned the economic and social policy making of the AKP government. First, it appears that the "social face" of the AKP is of a mostly instrumental nature. The strict regulation of prices and profits in the pharmaceutical sector that was implemented after September 2009 needs to be viewed as a redistributive, pro-poor reform. Yet the reform was merely the unintended consequence of other political dynamics.

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Everything You Need To Know

What is the Justice and Development Party (AKP)'s approach to economic policies?

The AKP, governing Turkey since November 2002, navigates a complex economic strategy. It often leans towards 'neoliberal restructuring,' including privatization and flexible labor markets. However, the AKP's policies are not purely neoliberal. Its conservative ideology and the need to maintain support from both citizens and powerful elites influence its decisions, leading to a combination of neoliberal and populist approaches. This balancing act is visible in social programs and the state's role in housing.

How does the AKP balance 'populism' and 'neoliberalism' in its policies?

The AKP's approach blends seemingly contradictory elements of 'neoliberalism' and 'populism.' This combination is seen in its economic and social policies. For example, in the pharmaceutical sector, the AKP introduced stricter price controls (a populist measure) while also undertaking 'neoliberal restructuring' in other areas such as privatization and reduced income tax rates. This approach is similar to the 'neoliberal populism' observed in Latin America, where governments combine market-oriented policies with measures designed to appeal to the masses and maintain political support.

What were the key features and the implications of the 2009 Healthcare Reform?

The 2009 Healthcare Reform introduced a global budget and stricter price controls on pharmaceutical products. This resulted in approximately 20 billion TL in savings between 2010 and 2012. This was a 'populist solution' that favored price controls over the 'neoliberal' alternative of shifting costs to consumers. This decision, contrasting with the AKP's typical preference for business-friendly policies, was driven by electoral considerations, limited business influence, and a lack of industrial policy focused on pharmaceutical development.

Why did the AKP implement stricter price controls in the pharmaceutical sector instead of privatizing costs?

The AKP chose stricter price controls in the pharmaceutical sector due to several factors. Primarily, electoral considerations played a crucial role, as reducing access to healthcare services could have triggered significant political backlash. Secondly, the absence of strong business interests advocating for higher medicine prices reduced potential opposition to price controls. Finally, the government's lack of a developmentalist commitment to using pharmaceutical policy as a tool for broader industrial strategy further supported the decision to implement price controls.

What can be concluded about the AKP government's approach to economic and social policymaking based on the pharmaceutical policy reform?

The pharmaceutical policy reform provides insights into the AKP's approach to economic and social policymaking. The implementation of strict price regulations should be viewed as a redistributive, pro-poor reform. This was the unintended consequence of other political dynamics. It supports the conclusion that the 'social face' of the AKP is mostly of an instrumental nature. The reform highlights how electoral considerations, business influence, and industrial policy considerations shape the government's decisions.