The Ottoman public debt administration and its role in the peripheralization of the Ottoman Empire

In the mid-1870s and 1880s many debtor countries faced severe external debt service problems and eventually had to agree on new contracts for the settlement of their debts. This process always involved power asymmetries in favor of the creditors. In some cases, the lenders were satisfied by institutional changes aimed at securing the repayment of their loans and the creation of opportunities to further their economic or political gains. In other cases, the lenders went even further and seized the direct control of the fiscal revenues of the debtor countries. Among these countries Ottoman Empire presents a unique case of an empire gradually dissolved and peripheralized within the capitalist world economy. This work analyzes the external debt crisis in the Ottoman Empire by focusing on the institutional changes following the establishment of the Ottoman Public Debt Administration (OPDA) and its role in the peripheralization of the Ottoman economy.; I argue that the peripheralization of the Ottoman Empire brought about a weaker state apparatus but also a more efficient one in terms of facilitating the operations of the world economy. This meant the relative diminution of the state's ability to interfere with the flows of factors of production in the world economy as well as specialization in certain products, transfer of new technologies to these sectors, improving means of transportation, and creation of a more efficient bureaucracy. Within this framework, it demonstrates the "double role" played by the OPDA. On the one hand, the function of the OPDA supports the "colonization through lending" arguments due to the crucial role it played in the peripheralization of the Ottoman xi Empire and in furthering the interests of the countries represented in the administration. On the other hand, the OPDA initiated several measures that improved the condition of the sectors under its control by introducing new technologies, increasing their productivity. It also generated positive externalities for other sectors. Moreover, it contributed to the development of state entrepreneurship in the empire and built the backbone of the early republican economy.