Independent Agencies, Distribution, and Legitimacy

The Case of Central Banks

Dados Bibliográficos

ID3318014
AutoresPeter Dietsch (0000-0002-7353-5132, Université de Montréal, autor correspondente)
Ano2020
Volume114
Fascículo2
Páginas591-595
Data de publicação2020-05-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoAmerican Political Science Review (JOURNAL)
Identificadores do periódicoISSN: 0003-0554 • E-ISSN: 1537-5943
EditoraCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s0003055419000790
OpenAlexW2997690757
IdiomaEN
Citações recebidas29
Referências citadas18

Delegation to independent agencies can reap real benefits for policy-making. In the case of monetary policy, it shores up the credibility of the central bank. However, the discretion of IAs needs to be constrained to ensure their legitimacy. This letter focuses on one potential constraint, namely, the idea that IAs should not make choices on distributional trade-offs. Given that monetary policy today has significant distributive consequences, if this constraint were respected, the independence of central banks would have to be repealed. This would be just as undesirable as a monetary policy whose distributive consequences remain unchecked. Instead, this letter encourages the search for alternative solutions and puts forward three possible institutional arrangements to manage the tension between the distributive consequences of monetary policy on the one hand and central bank legitimacy on the other

Business · Central bank · Constraint (computer-aided design · Credibility · Delegation · Discretion · Distribution (mathematics · Distributive property · Economics · Independence (probability theory · Legitimacy · Monetary economics · Monetary policy · Political science · Banking stability, regulation, efficiency · Economic Theory and Policy · Global Financial Crisis and Policies · Law