Politics of household indebtedness in Turkey

This paper deals with how Justice and Development Party (AKP) governments navigated the politics of household indebtedness in Turkey and utilized it towards the 2023 elections. It argues that household debt is a political tool with positive and negative consequences for incumbent governments. Households have been able to access debt instruments such as credit cards, consumer credit, car loans, and mortgages in Turkey since the onset of financialisation in the 2000s. AKP governments have benefited from the micro-level household wealth/debt accumulation as well as its macro-level economic implications for the construction-led, credit-dependent economic growth model. On the other hand, household debt has had destructive societal consequences such as bankruptcies, divorces, and suicides that became commonplace in the opposition narratives. Pinpointing the responsibility for indebtedness among households, financial system, regulatory agencies, and government, as well as devising policy solutions, has become a political struggle in the months leading up to the 2023 elections.