higher and higher interest rates on local assets and a lower depreciation rate because of the need to get short-term capital inflow, but Turkey did not take the needed precautions fiscally; that combined with the growing external deficit, there was a major crisis in 1994 (Ertuğrul and Selçuk p. 14-15). Indeed, it was this over-dependence on short-term capital inflows followed by the (arguably premature) liberalization of capital accounts, that led to the 1994 crisis of balance of payments; the exports simply could not keep up with the boom in imports (Öniş p. 4-5). A general policy prescription would be a currency peg, “to break the inflationary psychology… [m]ost populations are willing to sacrifice monetary sovereignty in the name of fighting inflation only when hyperinflation is fresh in their minds,” (Frankel p. 28). Inflation had been a persistent problem since before the transition phase. Since late in the 1970s Turkey has faced chronic high inflation; naturally, the high levels of spending led to fiscal imbalances and exchange rate adjustment, but further fueling the inflation was the delaying of stabilization, particularly in the 1990s, and the coalition government instead put in place populist measures like lowering the interest rates and keeping the lira overvalued (Nas p. 88). This is not unusual in political situations like Turkey’s. As Bird and Willet note, “coalition governments and those facing other configurations of political power that generate numerous veto players will often find their hands tied… If devaluation is perceived by the general public as carrying economic costs and is politically unpopular, it is hardly likely that opposition parties will want to be seen as entreating the government to devalue,” (Bird and Willet p. 66). Turkey’s persistent inflation, which was up to 60 percent before the 1994 crisis reached levels of 125 percent during it (Cömert and Yeldan, p. 8). The ‘94 crisis was not just the result of inflation, but was predominantly finance-led like the subsequent 2001 crisis would be (Cömert and Yeldan, p.21). But the program that was put in place to fix it would do little to help prevent the next crises, rather the reverse.