Central banking and the common good: crisis, contestation, and transformation

Kanad Bagchi

Chapter 3 in Central Banking, Monetary Policy and the Common Good, 2026, pp 27-52 from Edward Elgar Publishing

Abstract: Over the past decade, central banks have assumed an unprecedented role in global economic governance, especially with the backdrop of the multiple crises that the world has witnessed. Acting with powers that would have once been considered highly unorthodox and exceptional, they have intervened in ways that have stabilized economies while simultaneously raising questions about legitimacy, accountability, and distributional impacts. These interventions have often intensified inequalities and generated cross-border economic spillovers, particularly affecting peripheral economies. This chapter explores the notion of the ‘common good’ as a lens for understanding central banking's evolving purpose. Rather than offering a single definition of the common good, it examines how this concept has been invoked across historical and institutional contexts to both justify and challenge entrenched power structures. Central banks are framed as political institutions with the power to affect the systemic distribution of wealth and resources within a community, rather than simply as technocratic institutions. Drawing on critical political economy, heterodox economics and legal analysis, this chapter highlights how laws and institutional frameworks shape how central banks interpret and pursue societal objectives. Focusing on the post-crisis era, this chapter identifies contemporary expressions of common good in areas such as human rights, climate change and redistribution of monetary power. It concludes that the idea of ‘common good’ must express a subversive agenda that is able to challenge entrenched asymmetries, long-standing dynamics of power as well as articulate an anti-imperial critique of the international monetary system.

Keywords: Central bank independence; Climate change; Human rights; Inflation targeting; Monetary power (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035348299
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