Turkey’s economic woes should be a warning for other countries

ISTANBUL’S STOCK exchange does not open until shortly before 10am, a more civilised hour than most bourses. Investors therefore had time to brace themselves on March 22nd before discovering the full cost of President Recep Tayyip Erdogan’s reckless decision to fire Turkey’s admired central-bank governor, Naci Agbal, over the preceding weekend. The selling frenzy triggered an automatic suspension of trading twice in the first 45 minutes. Combined with a deep fall in the lira, Turkey’s stocks declined by over 16% in dollar terms by the end of the day.Turkey has grown faster than most emerging markets over the past decade, and even managed to eke out a modest expansion last year. But as Mr Erdogan’s party has accumulated power and audacity, it has eroded the institutional constraints that once ensured economic stability, including the autonomy of the central bank. Mr Agbal was unceremoniously sacked for doing too much to stop inflation. His predecessor was fired for failing to steady the lira. Mr Erdogan has yet to grasp that a central bank cannot avoid one of these improprieties without committing the other. He has now in two years.