On 6 September 2015 the Kurdish separatist group PKK attacked two armoured military vehicles in Daglica, a provincial town near Turkey's border with Iran and Iraq. This was the deadliest terrorist attack-17 dead and several others injured-since the launching of 'the peace process' in 2012. Announcing the incident on TV, President Recep Tayyip Erdogan suggested that such attacks would not have occurred if voters had given 400 MPs to 'one political party' in the June 2015 election. 1 After 13 years of single-party rule, the Justice and Development Party (AKP) founded by Erdogan had indeed lost its parliamentary majority in the June 2015 election and was forced to lead coalition talks with other parties. The national daily Hurriyet soon broadcast Erdogan's words from its website, thereby reinforcing the view widely shared by those in the opposition that the president had escalated the conflict with the PKK to win back conservative voters in the snap election scheduled for November 2015. Disturbed by his implied association with post-election violence, Erdogan protested to the newspaper. 2 A few hours later a group of AKP vigilantes, led by the leader of the AKP's youth branch and Istanbul MP, attacked Hurriyet's headquarters in Istanbul. 3 The police stood aside during the incident; 4 luckily no one was injured. This contentious day captured quite accurately the current condition of Turkish politics on the eve of the snap election. The AKP's desire to hang on to power despite its electoral defeat accompanied a dramatic rise in political violence and extra-parliamentary opposition, which, in turn, increased government pressure on dissent, including censorship in the media and implicit endorsement of violent attacks against the opposition by AKP supporters.

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The most recent global wave of democratic reversal is marked by executive takeovers. Politically motivated interventions in domestic markets aimed at restructuring the underlying power dynamics in society have been part and parcel of these takeovers. This article investigates the new political economy behind the AKP's competitive authoritarian rule in Turkey as an example of this larger trend. The article argues that the AKP government has built a loyal business class through an elaborate system of rewards and punishment since 2002. With the aim of consolidating its business constituency, the AKP politicized state institutions (debt collection, tax authorities, privatization, public procurement) and eroded the rule of law to distribute rents and resources to its supporters, transfer capital from its opponents to its supporters, and to discipline dissidents in business circles. These mechanisms allowed the party to skew the political playing field in its favour through its access to private resources as well as its disproportionate access to the media-built by pro-AKP businessmen-and thus underpinned the AKP's competitive authoritarian regime.

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After decades of multiparty politics, Turkey is no longer a democracy. A theory-upending case, the country has descended into a competitive authoritarian regime under the Justice and Development Party ( Adalet ve Kalkınma Partisi—AKP), despite rising income and education levels and strong links with the West. What accounts for democratic breakdown in such an unlikely case? Instead of ideological and institutional factors, we offer a political economy account. We contend that the coalitional ties that the AKP forged with businesses and the urban poor through the distribution of public resources has altered the cost of toleration for the party leadership and their dependent clients, while reducing the cost of suppression for incumbents. This new political calculus led to increasing authoritarianism of the AKP government through securitization of dissent, mounting repression, and systematic violation of civil liberties.