David O'Byrne in Istanbul -

One of the truisms of Turkish politics is that with local government funded almost exclusively by central government, voting in local elections is conducted almost exclusively on national issues.

Even before the corruption investigations launched back in December, Turkey's local elections on March 30 were always going to be a referendum on the 12 years of rule by the Justice and Development Party (AKP) of Prime Minister Tayyip Erdogan, focused firmly on the presidential elections scheduled for August this year and a general election in June 2015.

And as widely predicted the March 30 polls offered no surprises, with the AKP polling 45.56% of the vote and holding all of the major Turkish cities it held previously, while the main opposition Republican People's Party (CHP) and National Action Party (MHP) held their mainly western Turkish strongholds and the Kurdish Peace and Democracy Party (BDP) sweeping the boards in the south east of the country.

The main surprise was that in some cities the two main opposition parties appear to have succeeded in persuading their voters to vote tactically, with the main opposition Republican People's Party polling 40% in Istanbul thanks apparently to the National Action Party (MHP) vote collapsing to 4%. But even that creditable performance was insufficient to unseat incumbent AKP mayor Kadir Topbas who polled 48%.

At time of writing, some results remain to be called with Ankara and Antalya both apparently going to recounts having been decided in favour of the AKP by margins of 30,000 votes and 5,000 votes respectively.

And with widespread allegations of "irregularities" - including mysterious power cuts in districts hosting counts, unconfirmed reports of ballot papers being handed to voters pre-stamped in favour of the AKP and one report of filled ballot papers being seized from a parked car - close called results are unlikely to go unchallenged.

Graft or craft?

One other clear result of Sunday's poll is that the graft probes launched last December that apparently implicated Erdogan, members of his family, senior ministers, bureaucrats and prominent businessmen appear to have had little effect at the polls. This despite a steady stream of leaks of illicit telephone recordings allegedly featuring all of the above and implying improper or illegal behaviour and corruption on what, even by Turkey's poor standards, purports to be an entirely unprecedented scale.

Instead, the electorate appears to have accepted Erdogan's counter allegations of a nefarious foreign led plot perpetrated by people within the organs of the state .

And with fingers pointed firmly at the Cemaat organisation of US-based Islamic cleric Fetullah Gulen, all eyes are now on Erdogan.

Early indications are that conciliation is not on the agenda, with Erdogan warning that those who plotted against him "will pay the price".

How that will play out remains to be seen with it still far from clear how many of those allegations already levelled can be made to stand up. "This election alone won't change anything – one way or another," says Cengiz Aktar, professor of political science and senior scholar at Istanbul Policy centre, suggesting that Erdogan's primary aim is to "cover up the allegations and continue business as normal".

With that in mind, focus now returns to Turkey's presidential election in August - the first time in Turkish history the electorate has been trusted with electing its own head of state.

Presidential polls in August

Viewed by many as a watershed for Turkish politics, the presidential poll will likely set the tone of Turkish politics for far longer than the four years the elected president will serve, and will serve as an important test for the AKP ahead of next year's general election.

Not for nothing was Erdogan last year trying to build cross-party support for amending the Turkish constitution to allow a French-style executive presidency.

That initiative failed, but according to Aktar the lack of clarity on who exactly will stand, or on what basis, does not bode well for stability. "There is no quick fix, and we may have some very shaky months ahead," he explains.

One possible scenario, suggests Oral Calislar, veteran columnist on Turkish daily, Radikal. is for AKP co-founder and current president Abdullah Gul to return to lead the AKP and for Erdogan to be elevated to the presidency. "We will see a change in style," he says "Gul is a very different politician, less confrontational."

A more pragmatic style may help defuse tensions in Turkey, but it remains to be seen whether it will enable the government to fully address the graft allegations or repair Turkey's international image, which even before the corruption probes and the Twitter ban had been badly tarnished.

As recently as two years ago Turkey was still being touted as a model to the Arab Spring states, for how a majority Muslim country can operate as an effective parliamentary democracy. An image all but shattered by the emergence last week of an illicit recording of Turkish Foreign minister Ahmet Davutoglu and senior officials apparently planning a military attack on Syria ahead of Sunday's polls.

As well as the violence in Syria already spilling over the border, Turkey also faces impending economic problems.

It's the economy stupid

Figures published on March 31 confirmed that Turkey's GDP growth grew by just over 4% last year. However official predictions of a repeat 4% growth this year appear wildly optimistic, with a central bank survey of analyst projections indicating an average of 2.65%.

According to Inan Demir, chief economist at Turkey's Finansbank, 1.7% is more realistic. He points to a combination of the US Federal Reserve tapering its quantitative easing programme affecting Turkey's traditional dependence on external financing together with Turkey's domestic political problems. "Turkey is a much less attractive market for investors than it was a few years ago," he says.

Lower growth would also reduce the government's ability to finance the current account deficit, limiting the scope for increased government spending ahead of the presidential poll in August and next year's parliamentary elections. This could prove crucial given that the AKP's broadly successful handling of the economy is widely held to key to its electoral successes.

But the prospect of falling support for the AKP is one that could bring mixed results. "Markets tend to buy single-party governments and sell coalition governments," warns Demir.

However, he adds that a collapse in support for the AKP and the country moving towards elections that result in a potentially unstable coalition could mean the government emerges from the local elections emboldened. "Instead of being more inclusive in their policies, [the government] could choose to be more isolationist and confrontational – that could equally unnerve investors," he cautions.