Crises of Authoritarian Financialization: Monetary Policy in Hungary and Türkiye in the Polycrisis

We identify in this chapter the contradictory objectives of monetary policy under an authoritarian mode of financialization (AF) in Emerging Market Economies (EMEs) where the executive branch intervenes directly in monetary policy, banking supervision and retail banking. We interpret AF as a statist-authoritarian attempt to manage the vulnerabilities of growth strategies under subordinate financialization: following Marxist theories of the state, we argue that instead of providing political-economic stabilization, statist authoritarianism merely internalizes class conflicts within the state apparatus spurring accumulation and legitimation dilemmas for the state. We illustrate two divergent crisis trajectories of AF in Hungary and Türkiye in the 2020–22 period by showing how executive centralization fails to solve the increasingly contradictory objectives of stabilizing sovereign and private debt markets. Instead, we observe enhanced incoherence in monetary policy and a diminishing capacity of AF regimes to shore up rentier social contracts. Although both cases face accumulation and legitimation dilemmas in 2022, we explain the consolidation of inflationary and disinflationary monetary policies with differences in debt profiles, social blocs, and external financing conditions.