Purpose This study aims to examine the collapse of external financial institutions in fragile states and propose a framework for understanding community financial systems that endure. Design/methodology/approach Using concept development methods, it synthesises hybrid governance theory, economic anthropology and critical development studies to construct “vernacular finance” – socially embedded systems enacting ethical principles through practice. Five propositions are advanced and illustrated through triangulated analysis of academic, grey and civil society sources on Sudan’s 2023 crisis. Findings The analysis suggests Rotating Savings and Credit Associations bundled with community governance structures can crystallise into visible hybrid sovereignty, not merely survival mechanisms. These bundles practise vernacular Islamic finance through risk sharing and mutual aid, contrasting with donor-dependent institutions optimised for external legibility. Propositions specify the conditions, mechanisms and boundaries of this process. Research limitations/implications As a conceptual piece, this study advances testable propositions rather than empirical findings. Future ethnographic and comparative research is needed to validate the framework across diverse fragile settings. Practical implications The framework suggests shifting from template-driven reconstruction towards diagnostic mapping of existing community financial governance. Politically attuned pathways include tiered regulatory recognition and community-governed grant modalities with safeguards. Social implications Centring vernacular finance challenges development hierarchies that privilege external expertise over community capacity, suggesting that sustainable peace may depend on the sovereignties communities construct when states withdraw. Originality/value This study introduces “vernacular finance” as a bridging concept between the critique of blueprint failure and positive engagement with community systems, offering a framework for identifying legitimate governance partners in fragile contexts.
Purpose This study aims to analyze the structural determinants of industrialization and long-run growth in Turkiye, focusing on premature deindustrialization, limited technological upgrading and stagnant productivity as key barriers to escaping the middle-income trap (MIT). Design/methodology/approach A comprehensive system dynamics (SD) model is developed to capture the nonlinear and feedback-driven dynamics of the Turkish economy’s growth processes. Capital accumulation, labor dynamics, technology development, productivity formation and manufacturing performance are jointly modeled within an integrated feedback structure. The model is calibrated for 1989–2019 and used to evaluate alternative long-term development scenarios through 2049. Findings The simulations project an economic recovery over 2019–2027, followed by sustained long-run development through 2049 under an improved policy environment. Despite these favorable projections, addressing persistent structural weaknesses remains critical. Policies that rely primarily on exchange rate depreciation without accompanying improvements in institutional quality yield limited gains, whereas strategies that prioritize institutional reform and align exchange rate policy with sectoral priorities promote economic growth and increase the manufacturing sector’s share of output beyond 20%. Complementing these measures with policies addressing social demands further raises total output by approximately 30% relative to the baseline while preserving manufacturing performance. Overall, the results suggest that an integrated policy mix combining institutional reform, social policies and technology-oriented structural transformation can generate stronger long-run development outcomes than isolated policy interventions. Originality/value This study develops an integrated dynamic framework for analyzing Turkiye’s economic development process by jointly examining input accumulation, productivity dynamics, and structural transformation. It contributes to the growth and development literature by capturing these interconnected mechanisms within a unified feedback structure and providing a simulation-based framework for evaluating alternative development scenarios and policy interventions.
Purpose This paper aims to examine the impact of geopolitical risk (GPR) on the firm’s renewable energy consumption (REC) and to further examine whether this relationship varies for firms located in oil-importing and exporting countries, higher and lower energy diversification and emerging and developed countries. Design/methodology/approach Sample includes 2,008 firms across 29 countries globally, based on data availability. The study period is from 2014 to 2022. The study uses OLS with industry and year fixed effects. For robustness, alternative measures of dependent and independent variables are used and alternative tests are conducted to handle the issue of endogeneity. Findings The study finds that GPR has a positive impact on REC in firms. The study also found varying impacts for firms in oil-exporting and importing countries, countries with high and low energy diversification and emerging and developed countries. Originality/value Major studies examine the impact of GPR on REC across countries, but there is little attention given to the micro-perspective in a global scenario on how GPR affects firms’ REC across the globe.
Purpose This study aims to examine whether fiscal policy in energy-dependent economies responds systematically to rising public debt once energy-related effects are isolated. It introduces a non-energy fiscal reaction function framework and tests for the presence of a reserve cushion illusion, whereby accumulated foreign exchange reserves weaken fiscal discipline. Design/methodology/approach The analysis applies an augmented fiscal reaction function to Trinidad and Tobago using annual data from 1991 to 2024. The model focuses on the non-energy primary balance and non-energy output gap and explicitly incorporates official foreign exchange reserves. An autoregressive distributed lag approach is used to estimate both short-run and long-run relationships, allowing for mixed integration orders and small sample properties. Findings The results show no evidence of a stabilising long-run fiscal response to rising public debt. In the short run, increases in debt are associated with fiscal deterioration rather than adjustment. Foreign exchange reserve is negatively associated with the non-energy fiscal position, consistent with a reserve cushion illusion. These findings indicate that conventional fiscal indicators may overstate fiscal sustainability in energy-dependent economies. Originality/value To the best of the author’s knowledge, this study is the first to jointly integrate the non-energy primary balance, non-energy output gap and official reserves into a fiscal reaction function framework. It offers a novel approach to disentangling genuine fiscal adjustment from energy-driven buffer effects and provides new insights into debt sustainability assessment in resource-dependent economies.
Purpose Renewable energy has emerged as a tool for economic freedom in the new financial era where economies are investing in new technologies. While much of the existing research has focused on renewable energy consumption as a benchmark for development, less attention has been given to the financial investments fueling this progress and their broader impact on financial systems. This study examines the impact of renewable energy financing (REF) on financial development in 33 emerging economies from 2000 to 2022. Design/methodology/approach The study adopts the Generalized Method of Moments (GMM) approach and Granger Causality to make an analysis, account for potential endogeneity, ensure robustness and make inferences. Findings The findings show that while REF positively influences financial markets (FM), it has a detrimental effect on financial institutions (FI) and overall financial development (FD). However, regional analyses revealed differing patterns. In Africa, REF had a positive but insignificant effect on FD, while financial openness and government capital formation showed strong positive associations with FD and FM, respectively. In contrast, REF had a significant negative effect on FD in Asia, with no significant impact on FI and FM. Notably, institutional quality (IQ) moderated these relationships by reducing the negative impact of REF on FD and FI and enhancing its positive effect on FM. Practical implications These results suggest that the influence of renewable energy financing on financial development is context-dependent and strongly shaped by institutional quality. Policy suggestions encourage policymakers in emerging economies to prioritize governance reforms, strengthen financial institutions and promote market-based green finance instruments to ensure that renewable energy financing supports sustainable financial development. Originality/value Existing studies have predominantly used renewable energy consumption in their assessment, while this study provides novel evidence on how renewable financing has impacted financial markets and institutions.
