آیا رابطه بین استقلال بانک مرکزی قانونی و تورم وجود دارد؟ مدارک و شواهد از امریکا لاتین و کارائیب

This paper explores the effects of central bank independence (CBI) on inflation in a sample of 24 Latin American and Caribbean countries during 1985–2002. Using panel regressions, the paper finds a negative relationship between CBI and inflation. This result holds for three alternative measures of legal CBI, as well as for a measure of effective CBI, after controlling for international inflation, banking crises, and exchange rate regimes. However, the result is not entirely robust to the inclusion of an indicator of structural reforms that typically accompany changes in central bank legislation. In addition, evidence of causal relationship running from CBI to inflation is only supported by the results associated with the measure of effective CBI.

The 1990s entailed a decade of deep changes in central bank legislation worldwide. In many countries, central bank laws were reformed, increasing their autonomy in the design and execution of monetary policy with the objective of attaining and preserving price stability.1 These legal reforms were considered particularly promising in countries with a previous history of high inflation and government interference in monetary policy. As part of this trend, and after decades of persistent inflation and macroeconomic instability, central bank reform was extensively adopted by Latin American countries (LAC), starting with Chile in 1989. Typically, improvements in central bank independence (CBI) in LAC were accompanied and supported by far-reaching structural reform agendas, which were also aimed at laying the ground for faster and sustainable economic growth. In contrast, central bank reform was largely absent among Caribbean countries (CAR). On the theoretical side, changes in central bank legislation were motivated by the insights of the early time-inconsistency models of Kydland and Prescott (1977), and Barro and Gordon (1983), which showed that governments facing a trade-off between inflation and unemployment would tend to choose higher-than-optimal inflation rates. Latter work pioneered by Rogoff (1985) proved that this inflationary bias could be reduced by delegating monetary policy to an independent and conservative central banker, providing the basis for the subsequent wave of central bank reform. Empirical work applied to industrial countries has provided support to this idea, showing that increased CBI, usually proxied by indexes based on the provisions of central bank laws, or by the turnover rate of central bank governors, is negatively associated with inflation (see a survey by Berger et al., 2001). Evidence from developing countries, however, seems to be less conclusive. An early study by Cukierman et al. (CWN) (1992) reported a negative relationship between legal CBI and inflation for industrial countries, but failed to obtain similar results for developing countries. This asymmetry was attributed to a likely gap between legal and effective CBI, particularly in developing countries. A study by De Haan and Kooi (2000) using the turnover of central bank governors as a more direct measure of effective CBI, however, also failed to find a robust relationship between CBI and inflation. Results from parallel studies applied to Latin America and the Caribbean have been also inconclusive (Jácome, 2001 and Gutiérrez, 2003). The findings of this literature have been contested on some grounds, including the possibility of omitted variable bias (Posen, 1995, Campillo and Miron, 1997 and De Jong, 2002) and reverse causality running from inflation to CBI (Posen, 1993 and Posen, 1995). Furthermore, since most studies are based on cross-country approaches, they have some limitations to capture the temporal dimension of central bank reform—an issue particularly relevant for the case of developing countries. Some of these shortcomings have been addressed in other studies. The possibility of omitted variable bias was tackled by Loungani and Sheets (1997), who studied a sample of transition economies and reported a negative relationship between CBI and inflation, even after controlling for other economic policies such as fiscal performance and economic reforms. Another step forward was taken by Cukierman et al. (2002), who extended the CWN index to 26 transition economies during the 1990s, keeping track of CBI both during pre- and post-reform periods. After controlling for price liberalization, they concluded that increased CBI was unable to contain the initial inflationary effects of price liberalization, but showed that higher CBI became effective against inflation after the reform process acquired momentum. This paper examines the relationship between CBI and inflation in developing economies, using a sample of 24 countries in Latin America and the Caribbean during 1985–2002. It relates to Cukierman et al. (2002) in two aspects. First, it extends the CWN index to a regional sample of developing economies and keeps track of CBI during the pre- and post-reform periods, exploiting both the cross-sectional and the time dimensions of the data. The sample of Latin American and Caribbean countries provides a rich experiment for the hypothesis being tested, given the widespread adoption of central bank reform in Latin America, and the extraordinary reduction in inflation attained since the early 1990s. Second, it takes into account the effects of broader structural reform policies that usually go together with changes in central bank legislation. Since these typically include trade liberalization, labor market reform, tax reform, privatizations, and other structural policies with potential effects on inflation, the results obtained are less vulnerable to the possibility of omitted variable bias. At the same time, this paper departs from Cukierman et al. (2002) in four aspects. First, it exploits both the cross-sectional and time-series dimensions of the data by using panel regressions. Previous studies work with the average values of the series during pre- and post-reform periods, treating them implicitly as independent observations. Second, this paper tests for a causal relationship running from CBI to inflation by taking into account the likely endogeneity of central bank reform. Third, it performs robustness checks on the results by using two alternative indexes of legal CBI, namely the Grilli et al. (1991) index, and an extended version of the CWN index, which adds key aspects of the new central bank legislation in Latin America. Finally, following early work by Cukierman (1992) and Cukierman et al. (1992), the paper also performs an alternative robustness check using an index of effective CBI based on the turnover rate of central bank governors. The results show a negative relationship between the four alternative indicators of CBI and inflation, after controlling for international inflation, banking crises, and exchange rate regimes. However, the results are not entirely robust to the addition of an indicator of structural reforms in the sampled countries. Moreover, after taking into account the possible endogeneity of central bank reform, the paper finds a casual relationship running from CBI to inflation only for the tests based on the turnover rate of central bank governors. Overall, these findings provide some support to the idea that increased CBI is conducive to lower inflation, and are consistent with the existence of a gap between legal and effective CBI in Latin American and Caribbean countries. Furthermore, the results indicate that structural reforms have played an important role on the observed disinflation in the region, illustrating the complementary nature of various dimensions of economic policies. The rest of the paper is as follows. Section 2 describes the indexes of CBI used in the paper. Section 3 provides a map of central bank reform in Latin America and the Caribbean using cluster analysis. Section 4 performs a set of empirical exercises to assess the relationship between CBI and inflation, and explores causality. Section 5 concludes.

After decades of high inflation, most countries in Latin America and the Caribbean entered into a phase of more prudent macroeconomic management during the 1990s, with the aim of reducing inflation and improving economic performance. As part of a broader policy agenda, a reform of central bank legislation was adopted in many countries to strengthen central bank autonomy from the government, and facilitate the control of inflation. Based on the assessment of central bank charters and the relevant part of constitutions in 24 Latin American and Caribbean countries during 1985–2002, this paper finds significant regional differences in the evolution of legal CBI between LAC and CAR countries. While central bank reform was widely implemented in LAC during the 1990s, it was largely absent among CAR countries. As a result, most central banks in LAC enjoy today higher formal independence, while CAR central banks are still politically dependent on the executive branch. Leaving aside a few hyperinflationary episodes in LAC, however, inflation performance between LAC and CAR countries did not differ substantially during the sampled period. Differences in legal CBI, however, do not seem to necessarily translate into differences in the turnover rates of central bank governors, pointing to a possible gap between legal and effective CBI. In fact, the average turnover rate of central bank governors in the group of countries with no changes in central bank legislation was lower than the average turnover observed in reform countries. At the same time, within the latter group, there is evidence of a drop in the turnover rate following the implementation of central bank reform. In general, the results seem to support the idea that increased CBI is conducive to lower inflation. After controlling for international inflation, the exchange rate regime, the occurrence of banking crises, the paper finds a negative correlation between three alternative indexes of legal CBI and inflation. However, the results are not generally robust to the inclusion of an index of structural reforms. Also, a set of tests taking into account the possible endogeneity of central bank reform failed to support a causal relationship running from legal CBI to inflation. On the other hand, parallel exercises using the turnover rate of central bank governors a measure of effective central bank independence are consistent with causality running from CBI to inflation. The evidence also suggests that the extraordinary reduction in inflation achieved in the region was likely due to a combination of macroeconomic and institutional policies going beyond changes in central bank legislation. In particular, an index of broader structural reforms encompassing progress in trade policies, labor policies, financial sector policies, tax policies, and privatization, was found to be statistically and economically significant as a determinant of inflationary performance in the region. These results reveal the complementary nature of macroeconomic and institutional policies in various areas and warn on excessive optimism on the effects of legal central bank independence on inflationary performance.