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The Life Cycles of Competing Policy Norms - Localizing European and Developmental Central Banking Ideas

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  • Arie Krampf

Abstract

During the 20th century, the institution called central bank was diffused globally. However, central banking practices differed significantly between European market-based economies and developing economies. This paper traces the ideas and norms that shaped and legitimized central banking practices in the two areas. The paper argues that during the period from the 1940s to the 1970s two central banking policy norms existed: the liberal norm, which emerged in Europe, and the developmental central banking norm, which emerged in Latin America and diffused to East Asia. The paper seeks to trace the life cycles of the two norms: to specify the ideational content of each norm and to identify the actors and networks that produced, promoted and diffused them. The paper makes two contributions. First, theoretically, on the basis of Finnemore and Sikkink’s theory of international norms’ dynamics, it introduces a mechanism that explains the emergence and internationalization of an alternative international norm in the periphery that challenges the standard international norm. Second, it contributes to the literature on comparative regionalism by historicizing the liberal/European standard of central banking practices and by identifying the existence of an alternative standard for central banking practices in developing countries. The paper covers the period from the 1940s to the 1970s.

Suggested Citation

  • Arie Krampf, 2013. "The Life Cycles of Competing Policy Norms - Localizing European and Developmental Central Banking Ideas," KFG Working Papers p0049, Free University Berlin.
  • Handle: RePEc:erp:kfgxxx:p0049
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    References listed on IDEAS

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    1. Brimmer, Andrew F, 1971. "Central Banking and Economic Development: The Record of Innovation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 3(4), pages 780-792, November.
    2. Khatkhate, Deena & Villanueva, Delano P., 1978. "Operation of selective credit policies in less developed countries: Certain critical issues," World Development, Elsevier, vol. 6(7-8), pages 979-990.
    3. Fry, Maxwell J., 1982. "Models of financially repressed developing economies," World Development, Elsevier, vol. 10(9), pages 731-750, September.
    4. Fry, Maxwell J, 1978. "Money and Capital or Financial Deepening in Economic Development?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(4), pages 464-475, November.
    5. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
    6. John G. Gurley & Edward S. Shaw, 1956. "Financial Intermediaries And The Saving‐Investment Process," Journal of Finance, American Finance Association, vol. 11(2), pages 257-276, May.
    7. Arthur I. Bloomfield, 1957. "Some Problems Of Central Banking In Underdeveloped Countries," Journal of Finance, American Finance Association, vol. 12(2), pages 190-212, May.
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    Keywords

    regulations; European Central Bank; European Central Bank; economics; history;

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