یک تعریف واحد از استقلال بانک مرکزی که مناسب برای همه کشورها است

A new international data set covering over 100 countries for the period 1990–2004 is used to investigate the relationship between central bank independence (CBI) and inflation. CBI is a combination of de jure and de facto characteristics. No single mix of characteristics uniquely defines CBI. Consequently, no single definition of CBI is ‘right’ for all countries. The distribution of inflation around the world is concentrated in the tails. Hence, quantile regressions are estimated to investigate the role of CBI. We do find strong evidence that several core elements of what can be defined as CBI do reduce inflation.

Rarely has so much ink been spilled in economics as in the discussion about the pros and cons of central bank independence (hereafter CBI).1 The notion of “independence” is a misleading description of the position a monetary authority occupies in the affairs of State. An institution that is typically wholly owned by government2 can, at best, be autonomous but not entirely independent of government. Unfortunately, the proponents and opponents of central bank autonomy cannot agree on why such an arrangement is beneficial to society. For some (e.g., Forder, 2005), central bank autonomy is a convenient policy that suits certain governments when convenient, while others (e.g., Cukierman, 1992 and Eijffinger and De Haan, 1996) view the device as an important ingredient that can lead to a permanent reduction in inflation. Also remarkable perhaps is that, whereas the concept that a central bank acts in the best interests of society when it carries out its functions at arm's length of politicians is an old one, it is only since the early 1980s that this notion has truly captured the imagination of policymakers. Consequently, this development has stimulated serious academic research at both the empirical and theoretical levels. However, like the proverbial ‘product cycle’, the popularity of CBI has experienced its share of ups and downs. Curiously perhaps, while the importance of CBI has waned somewhat in the academic literature, as we shall see, it remains a sine qua non of good public policy (e.g., Segolato et al., 2007, and references therein). Indeed, it is a testament to the power and influence of the CBI concept that current policy discussions about the role of monetary policy focus on the desirability, for example, of inflation targeting versus other approaches to delivering certain monetary policy outcomes (e.g., Rasche and Williams, 2007, and references therein). Since inflation targeting generally presupposes that the central bank is autonomous 3 one gets the impression that the question about the importance of CBI as a policy prescription has been replaced with a debate over the appropriate monetary policy regime. In what follows, I shall argue that this interpretation should not be adopted essentially for two reasons. First, in empirical studies, the concept of CBI has usually been sufficiently loosely defined to fit the particular needs of the group of countries under investigation. For example, CBI is sometimes embodied in the turnover rate of governors (e.g., Dreher et al., 2007) while, in other studies, CBI is a feature either of the political landscape (e.g., Johnson and Siklos, 1996 and Banaian and Luksetich, 2001), or some principal component of an existing set of characteristics that define the relationship between the government and the central bank (e.g., Banaian et al., 1998). A large part of the explanation for this outcome resides in the fact that the empirical evidence for, or against, CBI has focused either on the experiences of developed or the less developed world, but ordinarily not both. To be truly meaningful, a useful measure of CBI needs to be applied to as many countries as possible, keeping in mind the inevitable constraints imposed by the availability of limited data as well as variations in the quality of the data across countries. This is especially true of investigations that consider the historical record of the last decade or two, as this is sometimes thought of as a ‘golden age’ when monetary policy has supplanted fiscal policy as the favored tool of stabilization policy. Consequently, this paper defines CBI as consisting of a combination of core elements. These core elements are chosen based on accepted theoretical arguments linking certain economic, and non-economic, variables to central bank independence and the usual metric used to assess its influence, namely inflation. One of the implications of the results presented below is that attempts to focus either on de facto or de jure factors to explain CBI's link to inflation misses the point. Instead, a mix of both types of elements is required both on political economy and economic theory grounds. Since it is argued that CBI is best thought of as a set of distinct core principles, not all countries need possess all of the necessary characteristics at once. As a consequence, there is no reason to believe that a unique mix of the critical elements is ‘right’ for all countries. This explains the title which is reminiscent of Frankel (1999) who concludes that no single exchange rate regime is ‘right’ for every country. The empirical literature, especially in economics, has sometimes tended to shy away from recognizing the fact that CBI is also importantly a political economy issue. Hence, it is difficult to divorce the connection between CBI and inflation from the equally important link between the general political and institutional environment that central banks operate under. After all, since the central bank is a creature of the State, its mandate, and the freedom to carry out its policies can, in principle, vary according to the political motives of the government in power (also see Banaian and Luksetich, 2001). None other than Alan Greenspan (2007) is at pains to point out: “I regret to say that Federal Reserve independence is not set in stone. FOMC discretion is granted by statute and can be withdrawn by statute (op.cit., p. 478). The rest of the paper is organized as follows. In the next section, I briefly explore the major theoretical and empirical themes that have informed and influenced the debate about CBI over the past two decades. Section 3 defines what is meant by a core set of principles that, together, gives meaning to the CBI concept, and proposes some principles that help identify it. Section 4 provides some preliminary stylized facts, as well as introducing a new data set intended to shed new light on the connection between CBI, as defined in this paper, and inflation that covers many more countries than other studies in the extant literature. Section 5 presents some formal empirical evidence that broadly supports the main contention of this paper namely that, while there are a few common elements across the world linking the general concept of CBI to inflation, no single CBI definition is right for all countries. Section 6 concludes with suggestions for extensions and future research.

This paper has argued that CBI should be interpreted as a collection of characteristics that are related to inflation. As a result, regressions that attempt to find a correlation between single value indexes of central bank independence and inflation will often fail to deliver the conventional wisdom, namely that CBI can deliver lower inflation. Moreover, existing indexes, with the exception of the GMT index, tend to focus excessively on statutory aspects of the relationship between the government and the central bank. Instead, there are non-statutory factors that influence the de facto degree of central bank autonomy and these will also eventually impact inflation. This is not to say that there is no place for indexes of CBI. After all, they offer a useful short-hand expression of the extent to which a central bank possesses the essential characteristics to guard against undue influence by the government. Instead, if one is to marshal evidence for the importance of CBI as a determinant of inflation, evidence across as wide a group of countries as possible is required. In this paper, I provide evidence on the significant connection between a vector of de jure and de facto factors that, together, define CBI, and can explain lower average inflation during the 1990–2004 period. More importantly, the manner in which inflation and the relevant CBI characteristics are distributed suggests that a quantile regression, and not the usual regression in the mean, is a more fruitful way to examine the determinants of inflation. It is, of course, too early to say how definitive the results of this paper are. First, it would be useful to include a measure of central bank governor turnover in the estimated specification but data for a large cross-section of countries was unavailable at the time this paper was written (see, however, Dreher et al., 2007). Second, although a de facto indicator of the exchange rate regime is included in the specification, the period under investigation is one where capital mobility around the world was significantly reduced and may have had an important impact on how economies reacted to external shocks. Recently developed indicators of capital mobility ( Edwards, 2007) might also be usefully considered in an expanded specification of the determinants of average inflation. Finally, severe data limitations prevent including some proxy for fiscal policy or the relative stability of the banking system. Clearly, other research has shown that these factors can also have an impact on inflation performance. This too is left for future research. Ultimately, the real test of the paper may come when inflationary pressures, thought to be relatively benign since the early 1990s, rise again. Needless to say, such a view is applicable to a much wider set of countries and has the added virtue of emphasizing the critical role of political economy in explaining the record of inflation. Research on the role and connection between CBI may, once again, return to the fore when forces against the autonomy of monetary authority vis-á-vis the government place renewed and significant stress on the characteristics that define CBI.