{
  "title": "Goal-Independent Central Banks: Why Politicians Decide to Delegate",
  "publication": "IMF Working Papers, November 1, 2006",
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  "summary": "A motivation for central bank independence (CBI) is that policy delegation helps politicians manage diverse coalitions. This paper develops a model of coalition formation that predicts when delegation will occur.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- A motivation for central bank independence (CBI) is that policy delegation helps politicians manage diverse coalitions.\n- This paper develops a model of coalition formation that predicts when delegation will occur.\n- An analysis of policy preferences survey data and CBI indicators supports the predictions.\n- Case studies, drawn from several countries' recent past and the nineteenth-century United States, provide further support.\n- The model explains why the expected negative relationship between CBI and inflation is not empirically robust: endogenous selection biases the estimated effect towards zero. The data confirm this."
    },
    {
      "heading": "Model and Predictions",
      "content": "- Develops a model of coalition formation that predicts when delegation to a goal-independent central bank will occur.\n- Focus on coalition structure and coalition-formation game as determinants of delegation decisions.\n- Uses the concept that delegation helps politicians manage diverse coalitions."
    },
    {
      "heading": "Empirical Analysis",
      "content": "- Uses policy preferences survey data and CBI indicators to test model predictions.\n- Findings from the data support the model's predictions.\n- Addresses the empirical relationship between CBI and inflation, highlighting endogenous selection bias that attenuates the estimated effect toward zero."
    },
    {
      "heading": "Case Studies",
      "content": "- Includes several country case studies drawn from recent past examples.\n- Includes case study material from the nineteenth-century United States.\n- Case studies provide additional support for the model’s predictions about delegation."
    },
    {
      "heading": "Key Findings and Implications",
      "content": "- Delegation to goal-independent central banks is motivated by coalition management needs of politicians.\n- Empirical support comes from survey data and CBI indicators.\n- Endogenous selection can explain the lack of a robust negative relationship between CBI and inflation in empirical work.\n\n---\n\n Content in this bundle\n\n- wp06256\n  - wp06256 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp06256 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/goal-independent-central-banks-why-politicians-decide-to-delegate-19993"
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    "Authors: Christopher W. Crowe",
    "Published: November 1, 2006",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451865165.001",
    "A motivation for central bank independence (CBI) is that policy delegation helps politicians manage diverse coalitions.",
    "This paper develops a model of coalition formation that predicts when delegation will occur.",
    "An analysis of policy preferences survey data and CBI indicators supports the predictions.",
    "Case studies, drawn from several countries' recent past and the nineteenth-century United States, provide further support.",
    "The model explains why the expected negative relationship between CBI and inflation is not empirically robust: endogenous selection biases the estimated effect towards zero. The data confirm this.",
    "Develops a model of coalition formation that predicts when delegation to a goal-independent central bank will occur.",
    "Focus on coalition structure and coalition-formation game as determinants of delegation decisions.",
    "Uses the concept that delegation helps politicians manage diverse coalitions.",
    "Uses policy preferences survey data and CBI indicators to test model predictions.",
    "Findings from the data support the model's predictions.",
    "Addresses the empirical relationship between CBI and inflation, highlighting endogenous selection bias that attenuates the estimated effect toward zero.",
    "Includes several country case studies drawn from recent past examples.",
    "Includes case study material from the nineteenth-century United States.",
    "Case studies provide additional support for the model’s predictions about delegation.",
    "Delegation to goal-independent central banks is motivated by coalition management needs of politicians.",
    "Empirical support comes from survey data and CBI indicators.",
    "Endogenous selection can explain the lack of a robust negative relationship between CBI and inflation in empirical work.",
    "**_wp06256**"
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