Central Bank Independence, Accountability, and Transparency

BERNARD J. LAURENS is currently Deputy Chief, Monetary and Capital Markets Department, International Monetary Fund, US. He began his career in the IMF in 1992. During his tenure, he has been extensively involved in domestic and external financial sector issues, and modernization and liberalization of countries monetary frameworks and exchange and capital account issues. He has authored several articles and publications on monetary and financial sector issues. Prior to joining the Fund, Bernard Laurens worked for the Bank of France. He also holds a degree in economics from the Institut d'Études Politiques of Paris.   MARCO ARNONE is Adjoint Professor of Economics and Finance of Emerging Markets (University of Eastern Piedmont) and Director of CeMaFiR, Italy. He has worked as an economist in the IMF's Monetary and Financial Systems and African departments, and has taught at Milan's Catholic and State Universities. Recent publications include: Primary Dealers in Government Securities (IMF 2005), Venture Capital for Development (V&P 2006), Banking Supervision: Quality and Governance, and Financial Supervisors Architecture and Banking Supervision (EE 2007), External Debt Sustainability and Domestic Debt in Heavily Indebted Poor Countries (RISS 2007), Central Bank Autonomy: Lessons from Global Trends (IMF 2008).    JEAN FRANÇOIS SEGALOTTO is a research fellow at the Centre for Macroeconomics& Finance Research (CeMaFiR), Italy. His research work and interestsfocus on monetary economics and institutions. Publications include: Central Bank Autonomy, Macroeconomic Performance, and Monetary Frameworks: a Global Comparison (Rubbettino, 2005); Measures of Central Bank Autonomy: Empirical Evidence for OECD, Developing, and Emerging Market Economies (IMF 2006); Central Bank Autonomy: Lessons from Global Trends (IMF 2008).

Foreword Acknowledgements Introduction PART I: SURVEY OF MODELS AND INDICATORS OF INDEPENDENCE Introduction Base Indicators of Independence Subsequent Literature and Empirical Studies on Base Indicators Conclusions PART II: SURVEY OF MODELS AND INDICATORS OF ACCOUNTABILITY Responsibility and Accountability The Concept of Accountability in the Literature Accountability Indices: Comparison of Empirical Results PART III: SURVEY OF MODELS AND INDICATORS OF TRANSPARENCY Introduction Rationale for Transparency The Concept of Transparency in the Literature Indicators and Measures in the Literature Conclusions PART IV: NEW INDICATORS OF INDEPENDENCE, ACCOUNTABILITY AND TRANSPARENCY Methodology for Assessing Central Bank Independence Methodology for Assessing Central Bank Accountability and Transparency PART V: RELATIONSHIPS BETWEEN INDEPENDENCE, ACCOUNTABILITY AND TRANSPARENCY Accountability and Transparency Accountability and Independence Transparency and Independence Conclusions PART VI: INDEPENDENCE AND INFLATION PERFORMANCE: NEW EMPIRICAL EVIDENCE PART VII: GLOBAL TRENDS AND POLICY LESSONS Global Trends in Central Bank Independence Global Trends in Central Bank Accountability and Transparency Global Trends in Central Bank Governance Lessons from Global Trends References