Why Do Politicians Implement Central Bank Independence Reforms?

Sven-Olov Daunfeldt, Jörgen Hellström and Mats Landström

Atlantic Economic Journal, 2013, vol. 41, issue 4, 427-438

Abstract: The purpose of this paper is to investigate why politicians around the world have chosen to give up power to independent central banks, thereby reducing their ability to fine-tune the economy. A new data-set covering 132 countries, of which 86 countries had implemented such reforms, was collected. Politicians in non-OECD countries were more likely to delegate power to independent central banks if their country has been characterized by a high variability in historical inflation and if they faced a high probability of being replaced. No such effects were found for OECD countries. Copyright International Atlantic Economic Society 2013

Keywords: Inflation; Institutional reforms; Monetary policy; Time-inconsistency; E52; E58; P48 (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: Why Do Politicians Implement Central Bank Independence Reforms? (2009)
Working Paper: Why Do Politicians Implement Central Bank Independence Reforms? (2008)
Working Paper: Why Do Politicians Implement Central Bank Independence Reforms? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:41:y:2013:i:4:p:427-438

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DOI: 10.1007/s11293-013-9391-1

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