One of the most important innovations in public finance management in Turkey at the end of the first decade of the 21st century was the introduction of the so-called fiscal rule.

The budget rule, which is a peculiar form of financial control over the authorities, severely limiting the possibility of using populist economic policy measures, can at the same time be considered a kind of guarantor of long-term stable development of the national economy. In this regard, it is important to consider the reasons that led Turkey to ultimately refrain from resorting to the budget rule, as well as the likely consequences of such a step.

Key words: Turkey, fiscal policy, budget rule, financial stability, transitional democracy, social policy, money issue, inflation.

Given the continuing instability in the development of the global economy, the question arises about its possible impact on the countries of the East, among which Turkey occupies a special place. Recently, the Turkish ruling elite has been actively promoting the country's economic achievements, which after decades of unstable growth has managed to turn into a hotbed of stability, survive the first wave of the crisis relatively painlessly and return to strong economic growth: after a decline in GDP of almost 5% in 2009, the country's economy grew by 9.2% in 2010, and in 2011 - by 8.5% [Ekonomik Rapor..., 2012, p. 367]. At the same time, according to the results of 2011, such important macroeconomic parameters as the budget deficit (1.3% of GDP), the rate of inflation (10.4%), and the relative size of the national debt (40% of GDP) [Ekonomik Rapor..., 2012, s. 221, 231, 367] remained quite prosperous, despite the absence of external pressure on Turkey since 2008 (we are talking about credit cooperation with the IMF) in terms of maintaining conditions for stable economic development.

So, how strong is Turkey's macroeconomic position, what are the mechanisms that ensure its maintenance, and finally, how completely has Turkey broken with the tradition of inflationary unstable development, which by the early 2000s remained one of the distinguishing features of the country's economy?

The answer to this question is largely provided by an analysis of the state and directions of development of the legislative and institutional environment in the country from the point of view of its readiness, regardless of changes in the political and economic environment, to ensure the priority of tasks to maintain financial stability in the national economy.

It should be noted that the attempt to change the legislative and institutional framework for the functioning of the fiscal sphere of the Turkish economy was largely unsuccessful-

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It is considered a delayed result of conceptual innovations in the field of state economic management in the West, where the development of their theoretical foundations and active implementation in practice began in the second half of the XX century.

The founder of the theory of public choice, J. Buchanan, based on the thesis that " methods of analyzing market behavior can be applied to the study of any field of activity where a person makes a choice "[Buchanan, 1997(1), p. 20], proposed an interpretation of politics as an exchange process, which allowed him to refute "a well-known philosophical misconception that people participate in political activities driven by a common desire to seek goodness, justice, and beauty "[Buchanan, 1997(1), p. 22]. Developing this position, he drew attention to the possible costs of the budget process in a democratic society - the adoption of an excessive budget, which led Buchanan to think about the need for "... a fundamental constitutional reform1 or even a revolution " [Buchanan, 1997 (2), p. 423]. Buchanan saw one of the main goals of such a reform as putting the "terrible Leviathan"2 into a new framework [Buchanan, 1997 (2), pp. 433, 438].

The mechanisms of limiting the populist state were elaborated in detail in the works of the Austrian economist F. A. Hayek. He saw one of the main problems in the fact that in the course of the practice of democratic development, the boundaries between the legislative and executive powers were blurred, which made it impossible for the former to restrain the latter: "The nature of modern parliamentary institutions is completely determined by the needs of democratic government, and not by democratic legislation in the strict sense of the word... "[Hayek, 1990, p. 47]. F. A. Hayek sees the danger of a situation when "legislation was entrusted to institutions that are mainly engaged in the affairs of government" in the fact that" a democratic assembly sends executive power without being bound by laws, that is, by general rules of conduct that are not subject to change " (Hayek, 1990, p.51). The way out of this situation, in his opinion, is to limit the power of the " all-powerful democratic government — - a structure that has emerged as a result of the merging of two power functions - legislation and government. The mechanism for such a restriction is to put a different power over the elected representative majority, thus implementing the old idea - " entrust the development of the code of justice to a different representative body than the one entrusted with the board." "The supreme power must... In essence, to have only one task: to keep the government, individuals and organizations within the framework of universal rules of conduct, " F. A. Hayek insisted [Hayek, 1990, p. 168, 200-201].

The question arises as to whether such practices of government restrictions are relevant for developing countries, in most of which, as is commonly believed, the formation of democratic regimes is at an early stage. But democracy is a necessary prerequisite for the very possibility of making a public choice, and therefore for forming a government oriented to the interests of the electoral groups that support it, and for the subsequent "rebirth" of the democratically elected government.

Therefore, it should be noted that there is a group of developing countries3 that have escaped the classic forms of colonial dependence, have taken the path of achieving economic independence earlier than others, and at the same time relatively early

1 The Buchanan Constitution is a social contract that establishes a social order, which is implemented in determining individual rights and creating a political structure that ensures compliance with the rules of individual behavior, taking into account the established rights [Buchanan, 1997(2) p. 305].

2 Refers to an overgrown, bureaucratic public sector.

3 Most of them, according to the current classification, belong to countries with developing (emerging) markets - that is, developing countries that have clear success in building a modern market economy due to a relatively higher initial level of development.

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those who have started to form and develop institutions of elective power. These countries have specifically national, but still have some lasting democratic traditions, which, as it turned out, have even more contributed to the establishment of a populist tradition in economic policy. We are talking about Latin American countries, and from Asian countries-about Turkey. Their economic development was characterized by unstable growth and periodic debt crises, while their political development was characterized by equally regular retreats from democracy and the transfer of power to the hands of the military.

R. Kaufman and B. Stallings, in their book" Macroeconomics of Populism in Latin America " [Kaufman and Stallings, 1991], examine in some detail the features of the national political process that led to the binding of the economic development of Latin American countries, starting in the 1930s, to the repeating trajectory of the populist circle, in the course of which governments sought to activate the economic development of Latin Economic growth was achieved by stimulating domestic consumption against the backdrop of a budget deficit and an active redistributive policy, which included, in particular, an increase in nominal wages and price controls to more effectively redistribute income in favor of its recipients, weighting the national currency to curb inflation and increase the real incomes of population groups not directly engaged in material production. As we can see, we are talking about economic policy measures, the long-term consequences of which are questionable or even negative, but which effectively ensure the "purchase of votes".

Explaining the phenomenon of economic development in Latin America, R. Kaufman and B. Stallings introduced the category of" transitional democracies " - those that arise in the conditions of transition from an authoritarian regime to a democratic one. At the same time, in their opinion, several changes of government are necessary before democracy can be recognized as consolidated (Kaufman and Stallings, 1991, p. 26).

R. Kaufman and B. Stallings point out several reasons why transitional democracies are particularly prone to populist policies. First, transitional democracies are most likely to occur in countries with unstable multiparty systems, which are initially characterized by populist tendencies. Second, these kinds of democracies face inflated economic expectations of their supporters. Third, in new democracies, institutional instability leads to a reduction in the time horizons of both authorized Governments and their opponents. Therefore, Governments receive additional premium dividends if they meet expectations for income redistribution at an early stage of their tenure, which simultaneously reduces the political risks associated with balance of payments and inflation problems that arise at a later stage. Institutional instability and limited time horizons mitigate the reaction of opposition political parties and economic agents to economic imbalances. Moreover, since wage earners and other groups of influence benefit from the acceleration of economic growth, it is quite typical for them to strive for" unrealistically high " wages, even if they know that in the future it will be eaten up by inflation.

Consolidated democracies, like authoritarian regimes, are less likely to experiment with populism. In a consolidated democracy, one or two parties form the ruling elites, with a strong electoral majority behind them. In other words, a society comes to consolidated democracy when stable ruling blocs are formed, and unexpected regime changes are unlikely. With a broader time horizon, it may be appropriate for the newly elected Government to initiate an unpopular election campaign.

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policies in the early period of government in order to gain political benefits from the success of its implementation at a later stage. In addition, like authoritarian regimes, in which the government initially does not rely on public support, consolidated democracies do not rely too much on meeting material requirements, since their legitimacy depends not only on economic but also political factors [Kaufman and Stallings, 1991, p. 26-27].

Thus, the instability and weakness of democratic institutions in the context of transitional democracies create additional prerequisites for the intensification of competition for the purchase of votes through the use of specific economic policy measures.

The development of Turkey, as well as Latin American countries, has been characterized by unstable economic growth, periodic debt crises, and equally regular retreats from democracy and the transfer of power to the hands of the military.

Thus, the Turkish researcher 3. Onis drew attention to the following similarities in the development of Argentina and Turkey: "In a relatively new and fragile democracy, both countries experienced periods of increased economic growth from time to time as a result of their inability to create a stable, crisis-free economic and political environment" [Onis, 2006, p. 5]. Thus, for some developing countries, including Turkey, the problem of restricting the populist state has become particularly relevant.

F. A. Hayek concretized the idea of neutralizing the state, for which "good governance becomes impossible" due to the fact that" politics turns into an endless battle for a share in the general pie " [Hayek, 1990, p.221] in relation to the needs of stabilizing economic development and combating inflation. In 1976, the first edition of F. A. Hayek's work "Private Money"4 was published, in which he stated:" The goals of managing the public finance system and providing the country with a satisfactory currency are completely different and, for the most part, contradict each other.. Assigning both tasks to the same agency has always meant confusion, and has led to disastrous results in recent years. This is reflected not only in the fact that money has become the main cause of economic fluctuations, but also in the uncontrolled growth of government spending. If we want to preserve a functioning market economy (and with it individual freedom), nothing can be more urgent than the dissolution of the unrighteous marriage between monetary and fiscal policy, a marriage that has long remained secret, although formally sanctified by Keynesian theory" (Hayek, 1996, p.89). The main idea of F. A. Hayek is that price stability can be achieved only by taking away from national governments their monopoly on money creation. An independent central bank, in his opinion, is not a sufficiently effective tool for influencing Governments in this regard.

Disillusionment with the Keynesian model of state regulation against the background of the aggravation of the problem of inflation in Western countries in the 1970s prepared their public opinion for a positive perception of the ideas of F. A. Hayek, who advocated the revival of the idea of" limited " state intervention in the development of national economies. One of the forms of their practical application should be considered the widespread use of the "fiscal rule" 5 proposed by M. Friedman in support of Hayek's ideas for the government, which, if possible, should be enshrined in the "monetary constitution" so that the growth of the money supply becomes constant and predictable. The monetary rule is a system of permanent restrictions on fiscal policy imposed by setting simple monetary rules.

4 Translated into Russian published in 1996

5 Otherwise-budget rules.

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quantitative limits on budget parameters [Fiscal Rules..., 2009, p. 4]. Thus, the monetary rule can be seen as a more easily achievable form of supreme financial control over an "all-powerful democratic government" .6
Fiscal policies based on monetary rules became particularly popular in the 1990s in both developed and developing countries. Along the way, several types of monetary rules were formed: rules that limit the allowable size of the budget deficit, rules that limit the size of public debt, rules that limit the amount of public spending, and rules that regulate the size of government revenues. By the end of the 2000s, some of their varieties were used in more than 80 countries that sought to reduce budget deficits and pursue a sustainable fiscal policy [Fiscal Rules..., 2009, p. 7]. Among the factors that led to a noticeable increase in the use of the budget rule, it is necessary to include in developed countries a noticeable increase in social spending during the implementation of the concept of a socially oriented market economy, and in developing countries-an increase in budget deficits due to increased public debt servicing costs.

Common prerequisites for all countries were, on the one hand, the widespread desire of politicians to get the maximum possible number of votes and the willing use of budget and tax policy tools that could not be more suitable for these purposes, and on the other hand, the growing attention of national constitutional developers to economic development issues, increasing public demands for transparency, reliability and controllability of financial decisions the growing desire in many countries to maintain macroeconomic stability, reduce budget deficits, limit negative government interference in the process of economic development, and put obstacles in the way of populist policies.

Usually, a country uses several types of rules at the same time. In this regard, the example of the EU countries is particularly clear. As you know, in the euro area countries, fiscal policy coherence is ensured by the commitment of each country to adhere to the Maastricht criteria. At the same time, there is a gradual increase in the number of additional monetary rules to support compliance with the basic criteria: if in 1990 there were 16 of them, then in 2008 - 67, of which 26 were related to regulating the size of the budget deficit, 18-the permissible size of public debt, 17-the growth standards of budget revenues [Yukseler, 2010, s. 8].

The global financial crisis of 2008-2009 and the anti-crisis management measures taken by national governments led to a noticeable easing of fiscal policy in the EU countries. As a result, the European agenda included the need to return to a balanced fiscal policy and return to compliance with the monetary rule for this purpose.

As for Turkey, the period from 1983 (the restoration of civilian rule in the country after another military coup in 1980) to 1993 was characterized by a lack of clear budget constraints and a low level of transparency

6 The use of the budget rule does not seem to be recommended in an economic downturn, when a growth-stimulating monetary policy is generally used. Nevertheless, F. A. Heisk was convinced that this kind of policy is the cause of depressions, and not the cure for them. "It is much easier," he wrote, " to give in to the demands of cheap money and cause a disorientation of production, followed by an inevitable reaction to it, than to help the economy get rid of the consequences of excessive development in certain specific directions. The instability of the market economy in the past was a consequence of the withdrawal of the most important regulator of the market mechanism - money-from the sphere controlled by the market process " [Haisk, 1996, pp. 78-79].

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budget policy. On the contrary, the flourishing of the extra-budgetary funds system during these years, being in contradiction with the principle of budget unity, led to a weakening of control over the use of a significant part of public expenditures. Only in 1984-1985, 24 extra-budgetary funds were established [Sonmez, 1992, p. 117], which were state institutions with the right to use funds from special financial accounts at their disposal, to which a part of tax revenues was transferred (some taxes were introduced specifically to finance the activities of funds). In addition, the activities of IOD funds were supported by budget transfers and the right to carry out loan activities. Expenditures of extra-budgetary funds were not included in the number of standard budget expenditure items, but were a kind of supplement to them. Therefore, the peculiarity of using extra-budgetary funds was that their expenditures were not controlled by the Mejlis, 7 which annually approves the amount of budget funds used only in the main (standard) areas.

Turkish economist M. Sonmez wrote, assessing the expanded practice of using extra-budgetary funds during the tenure of Prime Minister T. Ozal (1983-1989): "In addition to the consolidated budget, which was at the disposal of the Mejlis, there was a "budget of funds", which was mainly managed by the Office of the Prime Minister " [Sonmez, 1992, s. 117-118]. M. Sonmez directly connected its emergence with the fact that Turgut Ozal, in order to concentrate power in his hands and personally control the implementation of certain particularly important projects, needed to strengthen his own financial capabilities. To this end, the Prime Minister not only expanded the system of extra-budgetary funds, but also largely subordinated it to himself. According to M. Sonmez, Ozal controlled up to 90% of the funds accumulated in the funds, which turned into a kind of "shadow treasury" [Sonmez, 1992, p. 116].

Turkish researcher S. Bayramoglu Ozugurlu drew attention to the fact that the institution of extra-budgetary funds, which became stronger in the 1980s, became one of the manifestations of the general trend of the period, which consisted in strengthening the executive power, including the power of the Prime Minister. The 1982 Constitution gave the Council of Ministers the power to adopt instructions that had the force of law, and thus directly regulate the life of the country.8 Thus, we are talking about the very phenomenon of merging the executive and legislative powers, which F. A. Hayek wrote about the spread and incompatibility with good governance. Indeed, after 1983, Turkey faced the problem of growing budget deficits and accelerating inflation. The volume of government loans increased significantly, and short-term foreign capital was increasingly attracted to secure them. Disillusioned with the attractiveness of the Turkish market after the government's forced reduction of yields on government short-term debt securities, foreign investors began mass withdrawal of their funds from Turkey, which eventually led the country to the currency and financial crisis in 1994.

Since the crisis in Turkey, attempts have been made to expand the concept of the budget to include the totality of public spending, strengthen its unity and strengthen budget control, but these measures were not immediately implemented in full. The authorities ' efforts to streamline the budget system and strengthen control over it became more active only after the next financial crisis in 2001. One of the first steps in this direction

7 Mejlis - the Turkish Parliament.

8 Apparently, this refers to Article 115 of the current Constitution of the Republic of Turkey, which provides that in order to "establish the procedure for the implementation of the law or disclose the content of the range of prescribed actions, the Council of Ministers may issue instructions provided that they do not contradict the laws..." [Republic of Turkey..., 1990, p.335].

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On April 25, 2001, a new law on the Central Bank of the Republic of Turkey (CBTR) was adopted, which established the maintenance of price stability as the main objective of its activities and imposed a ban on lending by the Central Bank to the Treasury and other State institutions. At the same time, since 2001, under the stabilization loan agreement with the International Monetary Fund, Turkey has been using the primary budget surplus set relative to GDP (a budget whose expenditure structure does not include payments for servicing public debt) as the main tool for improving the balance of public finances, which meant that economic policy was aimed at gradually reducing the size of public debt.

In March 2002, Law No. 4749 "On Regulation of Public Finances and Debt Management" was adopted, which established the maximum allowable amount of net government loans: when the law on the budget for the current year was adopted, a decision was simultaneously made on the permitted amount of annual loans in the amount of the difference between estimated revenues and planned expenditures. During the year, the maximum amount of excess of the established limit was limited to 10%.

In December 2003, Law No. 5018 "On the Management and Control of Public Finances" was adopted, which provided for the use of a new budget structure conforming to international standards, which from now on should include the finances of the entire system of central authorities. Thus, if earlier some state bodies used sources of financing that were not included in the budget, from now on their revenues and expenditures were to be reflected in the so-called expanded budget of the central government. The law provided for the inclusion of extra-budgetary funds in the budget of the central government, which was supposed to ensure parliamentary control over their activities while maintaining a certain financial and administrative autonomy. The law also prescribed the use of EU standards in the management and control of public finances. Its provisions clearly defined the terms of reference of the Ministry of Finance: it was responsible for budget execution, setting accounting standards, financial control and informing the Government about its results. The law established the right to conduct an external audit in all structures of the central government.

The process of drafting and adopting the law was relentlessly spurred on by the IMF. Thus, the vote on the draft law in parliament was considered by the IMF specialists as a condition for completing their work on the next report on Turkey's compliance with the terms of the loan agreement with the Fund, without which it was impossible to allocate a new loan tranche. However, the final version of the law did not fully satisfy the IMF specialists, who said that the Turkish side was still not ready to completely abandon the fragmented budget execution procedure that had developed in previous years and ensure its complete unity, as evidenced by its refusal to shift responsibility for the process of financing budget investment projects from the State side within the framework of the adopted law. planning organization for the Ministry of Finance [Ulchenko, Mamedova, 2006, p. 100].

However, by 2006, the law had been extended to cover the entire system of government agencies. As a result, Turkey adopted an expanded interpretation of the budget, and the previously used concept of "consolidated budget" was replaced by the concept of "central government budget". Thus, the prevailing aggregate of state revenues and expenditures was reflected in the budget, which made it possible to use budget parameters more correctly for international comparisons. A new step towards the full implementation of Law No. 5018 was the transition of Turkey to the use of medium-term development programs and medium-term investment programs.

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financial plans. The first documents covered the period from 2006 to 2008. As a result, Turkey has adopted a three-year budget system since 2006.

The period from 1994 to 2010 is defined in the Turkish economic literature as the period of the "implicit monetary rule", referring to the attempts of the Turkish authorities to achieve a certain regularization in the sphere of public finances, while not resorting to the use of clearly defined budget policy limits (see, for example, [Yukseler, 2010]).

Summarizing the practice of using various forms of the implicit monetary rule, 3. Yukseler noted that various forms of deviation from it systematically took place. For example, on the eve of the entry into force of Law No. 5018 "On the Management and Control of Public Finances", namely in December 2005, the Housing Administration (TOKI) was withdrawn from its operation. As a result, over the following years, large-scale financial activities of the Administration related to the construction of residential buildings on state land plots and the sale of built residential space were not taken into account as part of the total amount of state revenues and expenditures. At the same time, the Fund is engaged in the construction of social facilities on state lands on a netting basis: investment costs are offset by the cost of the site. At the same time, state investment programs took into account only the part of the project cost that exceeded the cost of land.

The provision of the law on informing the general public about the cost of new projects that can have a significant impact on the size of state revenues and expenditures was not observed. For example, the public was not informed about the scale of additional costs associated with the introduction of measures such as reducing the income tax from 30 to 20%, social security reform, etc. Another violation was that medium-term development programs and medium-term financial plans were not always prepared by the deadline. And in 2009, due to a noticeable increase in the budget deficit due to the impact of the global financial crisis on the country, amendments were made to the provisions of Law No. 4749 "On Streamlining public Finances and Debt Management", which allowed to increase the volume of net state loans five times, namely from those provided for in the law on Budget for 2009. 13.5 billion to 74.5 billion tur. liras.

Financial discipline was not always enforced, which was the focus of the adopted laws. For example, the funds of the Unemployment Insurance Fund were transferred to the budget to finance some investment expenses, which led to double accounting of the corresponding revenues in the budget. Funds transferred from the Housing Construction Fund were not used to pay off treasury debts, but were taken into account as budget revenues, which ensured an artificial overestimation of the size of the revenue side, etc. [Yukseler, 2010, p. 3-4].

Let us emphasize that in relation to the problem under consideration, it is not so much the specific list and content of violations that is important, but the general government's apparent attitude to their possibility and permissibility under certain forced circumstances or even outside of them.

The lack of adherence to implicit monetary rules and the refusal of external control over their compliance (the Justice and Development Party (AKP) government decided not to conclude a new agreement with the IMF on a stabilization loan after 2008) have increased uncertainty about the further development of the country's macroeconomic situation. As a result, the national financial market has become in dire need of sending certain positive signals from the government. Therefore, as the Government's determination to abandon its previous forms of cooperation with the Monetary Fund became increasingly clear,

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The idea of replacing external financial control with internal control based on the budget rule has become increasingly relevant. The strategic plan of the Ministry of Finance for the period 2008-2012 for the first time announced the creation of a solid financial structure governed by the rules (emphasis added) [2008-2012 Maliye Bakanhgi..., 2008, p. 4-15]. In April 2009, a Pre-Accession Economic Program for 2008 was published, in which the transition to the monetary rule was announced as one of the goals [Republic of Turkey Pre-accession..., 2009, p. 32]. The crisis of 2009, on the one hand, made it impossible to introduce this measure immediately, and on the other hand, the growing imbalance in public finances in the context of the global crisis (in 2009, for the first time in many years, Turkey failed to ensure a primary budget surplus) gave rise to tense expectations in society associated with the introduction of the direct monetary rule, For the country's economic community, the government's commitment to the goals of financial stabilization would be significant. In May 2010, the draft law on the monetary rule was adopted for consideration by the Planning and Budget Commission of the Parliament. In the fifth article of the project [Mali Kural Kapipi Tasarisi..., 2010, p. 4], the monetary rule was stated in the form of the formula: a= y(a-1 -a*) +k (b-b*), where

a - government finance deficit for the current year relative to GDP;

a 1 - deficit of state finances based on the results of last year;

a*- the size of the state finance deficit planned for the medium-long term;

b - estimated real GDP growth rates for the current year;

b*- average long-term GDP growth rate;

y - coefficient of the speed of approaching the size of the budget deficit to the planned ones in the medium-long term;

k - coefficient that reflects the level of influence of the economic environment.

The planned medium-to long-term deficit (a*) was set at 1% of GDP.

So, according to the rule, the size of the current year's deficit depended both on the size of the previous year's deficit and on the state of the economic situation - the value of the k coefficient. Changing the value of the coefficient made it possible to conduct a fairly elastic financial policy, adapting it to the realities of national economic development: during periods of active GDP growth (over 5% per year), the economy was supposed to focus on increasing savings and more active repayment of public debt, and during periods of low or negative economic growth rates, an expansionary fiscal policy was allowed, how much deficit expansion will be necessary to increase the growth rate by each additional percentage point. As for the y coefficient, its value, varying from 0 to 1, characterized the speed of approaching the planned deficit size to the target: the closer the coefficient value is to 1, the higher the planned speed and, accordingly, the higher the size of the primary budget surplus set for the year. The value of the coefficient included in the formula was to be determined at the discretion of the authorities. Under the medium-term program for 2010-2012, a coefficient of 0.33 was set, which meant that during the financial year a third (33%) of the difference between the established medium-term deficit target and the actual size of the previous year's deficit was compensated.

Thus, the version of the monetary rule set out in the draft law was of a discretionary nature, since the amount of the state financial deficit set by it for each year could vary depending on both the results of the previous financial year and the current market situation, which together could influence the government's decision on how fast to reduce the deficit of public finances deficit to the target level. Therefore, Turkish researcher 3. Yukseler defined the government's proposals for regulating fiscal policy as

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"based on the monetary rule" [Yukseler, 2010, p. 11]. Another Turkish author is F. Kaya, based on theoretical works on the development and use of monetary rules, described the option chosen by the Turkish authorities as an "alternative monetary rule that is tied to a certain period" [Kaua, 2010, p. 411].

In the paper "Monetary Rules-justifying hopes for the sustainability of public finances", prepared by experts from the IMF's Fiscal Affairs Department, varieties of monetary rules are classified, including in terms of options for responding to economic shocks. The version of the rule chosen by Turkey is characterized as a variant of the policy of "fiscal equilibrium adapted to the phase of the economic cycle". This kind of policy, unlike, for example, the policy of a permanently balanced budget, is regarded as rather elastic and allows for the full measure of automatic stabilizers, but restricts the use of built-in stabilizers and at the same time provides a milder option for economic stabilization than even a cyclically balanced budget [Fiscal Rules..., 2009, p. 5-6].

Finally, the proposed rule was aimed at regulating only one parameter - the deficit of public finances. As a result, the question of the sufficiency of budget restrictions proposed by the draft law on the monetary rule began to be discussed in the country's economic circles. The view was expressed that it is advisable to introduce a more stringent version of it, especially in the field of reporting and control over execution. But more realistic analysts stressed the importance of relentlessly following the rule, at least in the form in which it was proposed in the draft of the relevant law. For example, 3. Yukseler emphasized that the implementation of the monetary rule, control over this process and reporting are no less important than the adoption of the rule itself [Yukseler, 2010, p. 12].

The further development of the situation exceeded all the alarming expectations generated by doubts about the ability of the Turkish authorities to show commitment to the implementation of the budget rule.: it was never adopted, despite a noisy campaign for its development and the approval of the draft law by a majority in the planning and budget commission of the Parliament.

To understand why the draft law was finally "put under the rug", it is necessary to take into account the arguments that guided some members of the parliamentary commission who did not belong to the opposition, but voted"against". In their resolution, they expressed doubts about the real desire of the Government to live in accordance with the budget rule, justifying their distrust by the facts of numerous violations of implicit rules. Among the violations was the fact that, although in the Mid-Term Program of September 16, 2009, the government announced that the monetary rule would become law within the first three months of 2010, this did not happen, and the draft was not considered by the commission until mid-2010. it showed a desire to avoid consideration of the draft law on the eve of the elections" (referring to the parliamentary elections held in June 2011 - N. U.The resolution also stated that "the AKP has not demonstrated the openness and transparency of its fiscal policy that are necessary prerequisites for success in using the monetary rule" [Mali Kural Kapipi Tasarisi..., 2010, p. 16].

Members of the parliamentary commission from the opposition also did not support the draft, but proceeded from their own motives, explaining their decision by saying that the use of the financial rule in conditions when the structure of budget expenditures has significantly deteriorated (we are talking about the fact that the increase in balance was primarily achieved by "sacrificing" public funds).

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investment spending), will only bring higher taxes and further reduction of public investment, which will lead to an even greater deterioration in the qualitative structure of the use of budget funds [Mali Kural Katti Tasarisi ..., 2010, p. 19].

Some media outlets have suggested that the problem is not so much the budget rule itself, but rather the irritating rise in popularity of the" father " of the draft law, State Minister A. Babacan9, who has gained fame as the most hardworking, respected and reliable member of the government [Milliyet, 15.07.2012]. The latter opinion partly coincides with the assessment of Umut Oran, a member of the opposition Republican People's Party, who noted that Prime Minister Recep Tayyip Erdogan wants to keep the management of the economy in his hands (Ogap, 2012). Indeed, despite measures to maximize the budget coverage of the entire system of public expenditures and increase the transparency and control of the public finance system, Turkey now successfully operates the largest extra-budgetary (italics mine - N.Y.) Social Assistance and Solidarity Fund. In December 2004, a directorate under the Prime Minister's Office was established to manage the Fund. In addition, the Housing Administration, which is responsible for the construction of social housing and housing for people with middle and low incomes, was transferred to the Administration of the Prime Minister, which provided it with greater autonomy and freedom of action.

These two institutions play a crucial role in the implementation of the active social policy of the ruling party. Being at the disposal of the Prime Minister's office, they are largely financed by budget transfers. But then we are no longer talking about a personal confrontation between the Prime Minister and the minister, but about a broader problem of R. T. Erdogan's rejection of the principle of limiting the powers of the executive branch and excluding from them decisions on the growth of the money supply in the national economy, which is defended by A. Babacan10.

The existence of certain contradictions on this issue between the head of the Cabinet of Ministers and one of its key members is also suggested by the nature of the ruling party as a pro - Islamic party, which means that the ideological connection of its leader, R. T. Erdogan, with the national version of the school of Islamic economics. Among its representatives, the idea of rejecting foreign sources of financing for economic growth and replacing them with sources located inside the Turkish economy is very popular. One of these sources is considered to be an additional monetary issue, which, according to representatives of this school, in reality does not lead to the negative consequences that the Western school constantly talks about (inflationary price growth), but it allows us to solve the problem of public debt and accelerate economic growth.

Thus, in 2002, representatives of this school proposed to try out the following "model" in order to get the country out of economic difficulties: immediately reduce additional taxes on producers imposed under agreements with the IMF in order to ensure a primary budget surplus; implement the necessary amounts of money issuance in order to eliminate the liquidity deficit and reduce the volume of necessary domestic loans. According to the authors of the "model", the additional money supply, having entered the banking system, in a short time should

9 Currently, A. Babacan holds the post of Deputy Prime Minister in the Government of Turkey.

10 In 1989 Ali Babacan graduated with the highest score from the Middle Eastern Technical University, which is a pro-Western higher educational institution. Since 1990, after receiving a special Fulbright scholarship, he continued his education in the United States, where in 1992 he received a Master of Business Administration (MBA) degree. In 1992-1994, he worked in one of the American consulting companies that provided services to senior managers. From 1994 to 2002, Ali Babacan was engaged in private business in Ankara. In 2001, he became a member of the Founding Council of the Justice and Development Party.

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It would be necessary to ensure an increase in consumption and investment, since the monetization of part of the state debt (that is, its issue coverage) would reduce the state's need for new loans, which would lead to a decrease in the interest rate, and bank funds would rush to the market in the form of investment and consumer loans [MUSIAD Arastirma raporlari..., 2002, s. 77].

One of the staunch representatives of the Turkish school of Islamic Economics X. Bash writes: "... the state, using the issue of money, with the help of social projects, especially helping the poor, should cover this gap (we are talking about the constantly existing, according to the author of the quote, the gap between supply and demand in favor of the former. - N. U.) and thus interfere in the economy to achieve the equilibrium of production and consumption" [Bash, 2011, p. 28]. It is also alarming that the Turkish press reported in late 2012 that A. Babacan decided to retire from big politics and return to business [Milliyet, 13.12.2012].

Taking into account the fact that the growth of social spending has become a kind of AKP business card for millions of recipients of various types of assistance and payments, the fundamental solution to the issue of budget restrictions, apparently, really seemed frightening to the Prime Minister. As can be assumed, the government considers active social policy as inviolable, and the budget rule-as an undesirable restriction on the way to increase public investment squeezed by social spending, the need for which may arise in the event of possible difficulties for the main investor in today's Turkey, the private sector, in the context of global economic turbulence. Indeed, according to the results of 2012, the country's economy grew by only 3% [Cumhuriyet, 04.01.2013]. The official reason that the rule was not adopted in the end is considered to be precisely the objection of the "investing ministries", who expressed concern that if additional investments were needed, their hands might be tied by such a rule [Milliyet, 02.02.2011].

In addition, the government is forced to take into account the growing political risks, in particular, related to the aggravation of the situation in Turkish-Syrian relations and the growing tension in the Kurdish regions of the country. The budget for 2013 provides for a significant increase in spending on security and defense [Milliyet, 11.12.2012].

However, the government has not yet successfully parried the attacks of those who recall the bill put on the table, emphasizing that the real size of the deficit in recent years has turned out to be even lower than it was envisaged by the monetary rule, if it were adopted. Indeed, according to expert calculations based on the monetary rule formula, the size of the deficit of the entire state finance system should have been 3.8% of GDP in 2011, and its actual level should have been only 1% [Kaua, 2010, p. 413; Ekonomik Rapor..., 2012, p. 229; Medium Term Program..., 2010, p. 61].

Thus, the task of maintaining financial stability through the implementation of a strictly restrictive fiscal policy turned out to be an important, but not an absolute priority of the ruling Justice and Development Party. The government's choice, which obviously reflects the current choice of Turkish society , is to maintain a somewhat elastic approach to solving this problem and be able to resort to easing fiscal policy, but only in an emergency, critical situation. Financial stability and predictability of the economic situation have become important factors for improving the business environment in the country, and hence the dynamism on which the popularity of the AKP's economic policy is based, and the party's leaders are well aware of the importance of fiscal discipline. But they preferred to reserve the right to abandon it if the ratio of benefits and losses associated with financial stabilization changes.

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Thus, financial stabilization is a choice they intend to protect, but not at any cost.

The fact that Turkey refuses to adopt the monetary rule means that the path to return to Turkey's inflationary past remains formally open, and adherence to the populist tradition in building economic policy is relevant for the ruling elite. Today's stabilization in Turkey is also the result of a relatively benign foreign economic environment for the country, but not yet a final change in values. Aware of the vulnerability of Turkey's current economic model due to the high degree of dependence of the country's private sector on the use of external sources of financing, as well as the existing political risks, the ruling party leaves open opportunities for budget spending growth.

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