Turkey’s Erdogan crony capitalism and Serbia’s anti-corruption fight: who gains, who pays?

In Turkey, Le Monde argues that President Recep Tayyip Erdoğan’s Islamist-conservative formation has, in less than a quarter century, effectively handed control of the economy to a narrow circle drawn from a loyal business class and clientelist networks. The piece frames this as a structural transfer of economic power rather than a series of isolated scandals, implying durable political capture of markets. While the article does not cite a single new law or transaction, its thrust is that the regime’s model of “connivance” has become the operating system for growth, contracting, and access to capital. For investors and policymakers, the key takeaway is that economic outcomes are being shaped by political loyalty and relationship capital. Strategically, this matters because captured economies tend to concentrate rents, weaken competition, and reduce the credibility of reforms—conditions that can spill into sanctions risk, capital flight, and policy unpredictability. In Turkey’s case, the beneficiary set is the regime-adjacent business ecosystem, while the losers are independent firms, smaller entrepreneurs, and any constituency that relies on transparent procurement and rule-based enforcement. In Serbia, Le Monde describes a different but related governance dynamic in Belgrade: rising “settling of scores” in the capital, alongside a claim that President Aleksandar Vučić leans on ultra-linked milieus with criminal connections to weaken the anti-corruption movement. The common thread is the use of informal power networks to manage political opposition and shape institutional outcomes. Market and economic implications are most direct for Turkey, where clientelist capitalism can distort credit allocation, procurement competition, and sectoral investment priorities, raising risk premia for equities and corporate credit. The article cluster does not provide specific instrument moves, but the direction is clear: higher governance risk typically translates into higher volatility for Turkish assets and greater sensitivity to external financing conditions. For Serbia, the market channel is governance and rule-of-law credibility, which can affect foreign direct investment sentiment, banking risk assessments, and the cost of capital for corporates exposed to regulatory enforcement. Switzerland’s NZZ commentary on militia systems is not directly tied to the same markets, but it reinforces a broader European theme: how local power structures and oversight quality influence institutional trust and, by extension, investment risk. What to watch next is whether these governance patterns harden into measurable policy changes—such as procurement reforms, enforcement actions against patronage networks, or credible anti-corruption prosecutions. For Turkey, key indicators include shifts in public contracting transparency, changes in competition enforcement, and signals from international lenders or rating agencies about governance and institutional risk. For Serbia, monitor the security environment in Belgrade (frequency and targeting of violent incidents), the operational independence of anti-corruption bodies, and whether political rhetoric translates into arrests that do not selectively spare allies. The trigger point for escalation would be a sustained increase in politically tinged violence or a visible crackdown that delegitimizes anti-corruption efforts; de-escalation would look like consistent, case-based enforcement and widening space for civil oversight.

Geopolitical Implications

• 01

  Institutional capture in Türkiye can reduce reform credibility and increase external financing and sanctions-related risk sensitivity.

• 02

  In the Balkans, the alleged use of criminally connected networks to counter anti-corruption efforts can undermine democratic consolidation and EU-alignment credibility.

• 03

  Violence linked to governance contests can create a feedback loop: weaker oversight enables rent-seeking, which further erodes legitimacy and investor confidence.

Key Signals

• —Turkey: measurable changes in public procurement transparency, competition enforcement actions, and lender/rating-agency commentary on governance.
• —Serbia: trends in politically linked violent incidents in Belgrade and whether anti-corruption investigations expand beyond safe targets.
• —Civil society space: indicators of whether oversight bodies, courts, and media can operate without intimidation.
• —Local governance integrity: whether NZZ-style scrutiny of power structures leads to reforms that improve accountability.