The economic policy of the Ottoman Empire (1876-1922)

This paper explores the economic policy of the Ottoman Empire during the Abdul Hamid II's reign and the Young Turks period focusing on the fiscal crisis which exposed the Empire to an increasing financial dependence on European capital markets, leading to bankruptcy in 1876 and to the subsequent establishment of the Ottoman Public Debt Administration (OPDA) in 1881. Although tax base rose during the period under consideration, thanks to the long-term effect of the Tanzimat reforms -particularly the Land Code of 1858 - the additional revenues were insufficient to balance the budget deficit. At the same time, the credibility offered to the European investors by the OPDA increased temptation for the Ottoman government to go on contracting new foreign debts. The government's failure to get out of the external debt spiral proved to be fatal to the Empire.