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

by Sylvia Maxfield

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.

Product Details

ISBN-13:	9780691002439
Publisher:	Princeton University Press
Publication date:	08/02/1998
Edition description:	Revised ed.
Pages:	192
Product dimensions:	7.75(w) x 10.00(h) x (d)

About the Author

Sylvia Maxfield is Associate Professor of Political Science and Management at Yale University. Among her works is Letting Capital Loose: Financial Liberalization in Interventionist States.

Table of Contents

Acknowledgments
1	Central Bank Independence: Why the Interest?	3
2	The Political Sources of Central Bank Independence	19
3	International Capital Flows and the Politics of Central Bank Independence	35
4	Central Bank Independence in the 1990s	50
5	The Politics of Changing Central Bank Authority: Thailand	71
6	The Politics of Changing Central Bank Authority: Mexico	91
7	The Politics of Changing Central Bank Authority: South Korea	107
8	The Politics of Changing Central Bank Authority: Brazil	121
9	Conclusion	138
Notes	151
Index	181

What People are Saying About This

From the Publisher

"This is an ambitious book that summarizes a lot of arguments and brings together a lot of evidence on a topic of growing interest to economists, political scientists and policymakers.... This book will be a valuable complement to the large and growing literature on the economics of central banks in industrial countries."—Stephen B. Webb, Senior Economist, The World Bank

"This is a first-rate book on a very important issue: the sources and effects of central bank independence. For students of international political economy, the question of how central banks acquire influence has become an extremely hot topic in recent years. Maxfield's work is the first book-length study I know of that deals with the role of central banks in developing countries."—Robert Kaufman, Rutgers University

Webb

This is an ambitious book that summarizes a lot of arguments and brings together a lot of evidence on a topic of growing interest to economists, political scientists and policymakers.... This book will be a valuable complement to the large and growing literature on the economics of central banks in industrial countries.
— Stephen B. Webb, Senior Economist, The World Bank

Robert Kaufman

This is a first-rate book on a very important issue: the sources and effects of central bank independence. For students of international political economy, the question of how central banks acquire influence has become an extremely hot topic in recent years. Maxfield's work is the first book-length study I know of that deals with the role of central banks in developing countries.
— Robert Kaufman, Rutgers University

Editorial Reviews

"This is a first-rate book on a very important issue: the sources and effects of central bank independence. For students of international political economy, the question of how central banks acquire influence has become an extremely hot topic in recent years. Maxfield's work is the first book-length study I know of that deals with the role of central banks in developing countries."--Robert Kaufman, Rutgers University

"This is an ambitious book that summarizes a lot of arguments and brings together a lot of evidence on a topic of growing interest to economists, political scientists and policymakers.... This book will be a valuable complement to the large and growing literature on the economics of central banks in industrial countries."--Stephen B. Webb, Senior Economist, The World Bank

From the Publisher

"Right now the name of the game in Brazil is the credibility of President Fernando Henrique Cardoso's commitment to fighting inflation, the roots of which are found in a serious and immediate fiscal reform. A direct presidential appeal to Brazilians for support of such reform is in order. But rather than recommend the partial privatization of Petrobras or cut the budget of the National Development Bank of Brazil and call for popular support to do so, Mr. Carsoso has been politically passive. This is creating an ever widening credibility gap at a time when investors are looking for political leadership." -- Sylvia Maxfield (January 29th 1999)

Wall Street Journal