The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy Export

@article{citeulike:2214591, abstract = {Governments unable to make credible promises hinder economic development and effective policymaking. Scholars have focused considerable attention on checks and balances and the delegation of authority to independent agencies as institutional solutions to this problem. The political conditions under which these institutions enhance credibility, rather than policy stability, are still unclear, however. We show that checks—multiple veto players—enhance credibility, depending on the extent of uncertainty about the location of the status quo, on how agenda control is allocated among the veto players, and on whether veto players have delegated policymaking authority to independent agencies. In the context of monetary policy and independent central banks, we find evidence supporting the following predictions: Delegation is more likely to enhance credibility and political replacements of central bank governors are less likely in the presence of multiple political veto players; this effect increases with the polarization of veto players.}, author = {Keefer, Philip and Stasavage, David}, citeulike-article-id = {2214591}, journal = {American Political Science Review}, keywords = {formaltheory, monetarypolicy, politicaleconomy}, month = {August}, number = {3}, pages = {407--423}, posted-at = {2008-01-10 14:34:59}, priority = {2}, title = {The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy}, volume = {97}, year = {2003} }

TY - JOUR ID - citeulike:2214591 L3 - citeulike-article-id:2214591 N2 - Governments unable to make credible promises hinder economic development and effective policymaking. Scholars have focused considerable attention on checks and balances and the delegation of authority to independent agencies as institutional solutions to this problem. The political conditions under which these institutions enhance credibility, rather than policy stability, are still unclear, however. We show that checks—multiple veto players—enhance credibility, depending on the extent of uncertainty about the location of the status quo, on how agenda control is allocated among the veto players, and on whether veto players have delegated policymaking authority to independent agencies. In the context of monetary policy and independent central banks, we find evidence supporting the following predictions: Delegation is more likely to enhance credibility and political replacements of central bank governors are less likely in the presence of multiple political veto players; this effect increases with the polarization of veto players. IS - 3 JF - American Political Science Review EP - 423 TI - The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy VL - 97 SP - 407 KW - formaltheory KW - monetarypolicy KW - politicaleconomy AU - Keefer, Philip AU - Stasavage, David PY - 2003/08// ER -