The political economy of Ottoman public debt: insolvency and European financial control in the late nineteenth century - 18

In the late nineteenth century many debtor countries faced severe external debt service problems and eventually had to agree on new contracts for the settlement of their debts.

This process always involved power asymmetries in favour of the creditors.

In some cases, the lenders were satisfied by institutional changes aimed at securing the repayment of their loans, and the creation of opportunities to further their economic or political gains.

In other cases, the lenders went even further and seized direct control of the fiscal revenues of the debtor countries.

Among these countries, the Ottomans present a unique case of an empire gradually dissolved and peripheralized within the capitalist world economy.

This book analyzes the external debt crisis in the Ottoman Empire by focusing on the institutional changes following the establishment of the Ottoman Public Debt Administration (OPDA) and its role in the peripheralization of the Ottoman economy. _x000D__x000D_The limitations of a pre-capitalist economy largely based on subsistence production determined the limited external trade potential of the empire.

The institutional reforms initiated by the OPDA restructured the export oriented sectors of the Ottoman economy, contributed to the gradual dissolution of subsistence production, and consequently boosted external trade of the empire.

Moreover, the expansion of foreign trade was accompanied by a drastic increase in foreign direct investment after the establishment of the OPDA, which created a safer environment for foreign investment.

Within this framework, Murat Birdal demonstrates the 'dual role' played of the OPDA.

On the one hand, the OPDA represented a striking example of 'colonization through lending' arguments, due to its pivotal role in the exacerbation of European imperialism.

On the other, the OPDA made a significant contribution to the modernization of Turkish public financial administration and the establishment of a public enterprise system, which later formed the backbone of the modern Turkish economy. _x000D__x000D_Murat Birdal here provides the first in-depth study of the Ottoman Public Debt Administration.

This book will be invaluable to scholars of Ottoman, Middle East and economic history._x000D_