Gatekeepers of Growth: The International Political Economy of Central Banking in Developing Countries

By Sylvia Maxfield

Book Overview

Central banks can shape economic growth, affect income distribution, influence a country's foreign relations, and determine the extent of its democracy. While there is considerable literature on the political economy of central banking in OECD countries, this is the first book-length study focused on central banking in emerging market countries. Surveying the dramatic worldwide trend toward increased central bank independence in the 1990s, the book argues that global forces must be at work. These forces, the book contends, center on the character of international financial intermediation. Going beyond an explanation of central bank independence, Sylvia Maxfield posits a general framework for analyzing the impact of different types of international capital flows on the politics of economic policymaking in developing countries.

The book suggests that central bank independence in emerging market countries does not spring from law but rather from politics. As long as politicians value them, central banks will enjoy independence. Central banks are most likely to be independent in developing countries when politicians desire international creditworthiness. Historical analyses of central banks in Brazil, Mexico, South Korea, and Thailand, and quantitative analyses of a larger sample of developing countries corroborate this investor signaling explanation of broad trends in central bank status.

• Format: Paperback
• Language: English
• ISBN: 0691002436
• ISBN13: 9780691002439
• Release Date: July 1998
• Publisher: Princeton University Press
• Length: 192 Pages
• Weight: 0.80 lbs.
• Dimensions: 0.5" x 6.1" x 9.2"

Customer Reviews

An excellent comparative study of central bank independence

The increasing insulation of monetary policy-making process from the executive branch of government corresponds to the expansion of financial market. There are number of studies on central bank independence in developed countries, but the same issue in developing countries has not attracted a sufficient attention. In this lease explored field, Maxfield examines the contending arguments on central bank independence and provides rich case studies of middle income developing countries in the context of international political economy. This book is recommended to everyone who is interested in political economy and democratization.