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Monetary and fiscal institutional designs


  • Dimakou, Ourania


Two investment decisions in economic institutions are feasible; investments in monetary institutions in the form of delegation of monetary policy to a more conservative or independent central bank, and investments in fiscal capacity, in the form of combating bureaucratic corruption and its consequent fiscal revenue leakages. Within this framework, we investigate the interactions among those two institutional decisions and the obtained institutional structure. The findings provide support of strategic complementarities; investments in monetary and fiscal institutions reinforce each other. In addition, we identify a set of determinants that impact on the government’s decisions to improve economic institutions, particularly, the structure and intensity of the initial corruption level, the amount of distortions caused by taxation and the policymaker’s goals and preferences across its objectives.

Suggested Citation

  • Dimakou, Ourania, 2013. "Monetary and fiscal institutional designs," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1141-1166.
  • Handle: RePEc:eee:jcecon:v:41:y:2013:i:4:p:1141-1166 DOI: 10.1016/j.jce.2013.02.001

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    References listed on IDEAS

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    Cited by:

    1. Dimakou, Ourania, 2015. "Bureaucratic corruption and the dynamic interaction between monetary and fiscal policy," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 57-78.

    More about this item


    Monetary and fiscal policies; Corruption and anti-corruption strategies; Central bank reform; Strategic complementarities;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption


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