An Integrative Approach to the Politics of Central Bank Independence

Lessons from Britain, Germany and Italy

Bibliographic Data

ID6406478
AuthorsLucia Quaglia (0000-0001-8816-0583, corresponding author)
Year2005
Volume28
Issue3
Pages549-568
Publication date2005-05-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueWest European Politics (JOURNAL)
Journal identifiersISSN: 0140-2382 • E-ISSN: 1743-9655
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/01402380500085798
OpenAlexW1964020668
LanguageEN
Citations received13
References cited43

This article proposes a three-tier framework for analysing the politics of central bank independence. International factors explain the general trend towards central bank independence. However, they are framed differently by various national systems. At the national level, for heuristic purposes, the analysis can be structured by focusing on 'suppliers' and 'demanders' of central bank independence. The former are the political authorities, whereas the latter are socioeconomic forces and interest groups, with the central bank positioned in-between. At the micro-institutional level, central banks can be influential economic and political actors situated at the interface between levels of governance. The added value of this integrated framework is appraised using one case study, the Bank of Italy's path to independence, which is compared with the experience of the Bank of England and the Bundesbank. In contrast to many works on central bank independence, the methodology adopted here is qualitative, rather than quantitative, and is grounded in empirical research. Acknowledgements The author is grateful to the British Economic and Social Research Council for financial support for her doctoral thesis (Award R00429834634), upon which part of this article is based. Further research was conducted during a Jean Monnet Fellowship at the Robert Schuman Centre, European University Institute, Florence. Usual disclaimers apply. Notes For a comprehensive review of this literature see De Haan and Eijiffinger (Citation1996). For a thorough discussion of these indices see Cukierman (Citation1992). On the new institutional economics, see North (Citation1990). It is revealing that these three factors were all mentioned in the two reports that paved the way to the reform of the Bank of England in 1997 (CitationRoll 1993 and CitationTreasury and Civil Service Committee Report 1993). On the political economy of exchange rate regime see Frieden (Citation1996); Hefeker (Citation1997); Walsh (Citation2000). http://www.bundesbank.de/download/presse/publikationen/bbkgesetz_lesefassung_20020323_en.pdf. The Bundesbank had also been internally reorganised after German reunification (see CitationKaltenthaler 1996). Nigel Lawson's internal memo that proposed a fully worked out plan for the independence of the Bank of England to Prime Minister Margaret Thatcher in 1988 is not included here. This time frame does not encompass the period at the end of the 1990s when Oskar Lafontaine was Finance Minister. Furthermore, some scholars (Lohmann 1998; Sturm 1995) argued that the behavioural independence of members of the Bundesbank Council varied depending upon the partisan composition of the federal and Länder governments, whereby the Bundesbank's behaviour was most independent when opposition parties were responsible for the appointment of the majority of the Bundesbank Council. For an overview see Arcelli (Citation1992) and Ciocca (Citation2000). Financial Times, 10 November 1998. For a discussion of three different approaches see Giovannini (Citation1993). Parliamentary hearings of Governor Ciampi 1992, 1993

Economics · Economy · Independence (probability theory · Political economy · Political science · Politics · Sociology · Economic Theory and Policy · Fiscal Policies and Political Economy · Global Financial Crisis and Policies · Law · Public Administration

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