Public governance of central banks: an approach from new institutional economics
AbstractThe governance of central banks has two dimensions: corporate governance and public governance. Public governance is an institutional framework whereby the general public governs a central bank by and through the legislative and executive bodies in a country. This paper argues that the literature of new institutional economics sheds new light on the public governance of central banks. First, Williamson’s theory of "governance as integrity" (probity) is applied to the internal management of central banks. Moe’s theory of "public bureaucracy" is applied to the concept of central bank independence. Second, we apply agency theory to the issues associated with central bank independence and accountability. Third, public choice theory is applied to central bank independence.
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Bibliographic InfoPaper provided by Bank for International Settlements in its series BIS Working Papers with number 299.
Length: 48 pages
Date of creation: Mar 2010
Date of revision:
central bank; public governance; transaction cost economics; public choice;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-CBA-2010-04-11 (Central Banking)
- NEP-MON-2010-04-11 (Monetary Economics)
- NEP-PBE-2010-04-11 (Public Economics)
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