TY - JOUR
T1 - The Limits of Delegation
T2 - Veto Players, Central Bank Independence, and the Credibility of Monetary Policy
AU - Keeper, Philip
AU - Stasavage, David
N1 - Copyright:
Copyright 2013 Elsevier B.V., All rights reserved.
PY - 2003/8
Y1 - 2003/8
N2 - Governments unable to make credible promises hinder economic development and effective policymaking. Scholars have focused considerable attention on checks and balances and the delegation of authority to independent agencies as institutional solutions to this problem. The political conditions under which these institutions enhance credibility, rather than policy stability, are still unclear, however. We show that checks-multiple veto players-enhance credibility, depending on the extent of uncertainty about the location of the status quo, on how agenda control is allocated among the veto players, and on whether veto players have delegated policymaking authority to independent agencies. In the context of monetary policy and independent central banks, we find evidence supporting the following predictions: Delegation is more likely to enhance credibility and political replacements of central bank governors are less likely in the presence of multiple political veto players; this effect increases with the polarization of veto players.
AB - Governments unable to make credible promises hinder economic development and effective policymaking. Scholars have focused considerable attention on checks and balances and the delegation of authority to independent agencies as institutional solutions to this problem. The political conditions under which these institutions enhance credibility, rather than policy stability, are still unclear, however. We show that checks-multiple veto players-enhance credibility, depending on the extent of uncertainty about the location of the status quo, on how agenda control is allocated among the veto players, and on whether veto players have delegated policymaking authority to independent agencies. In the context of monetary policy and independent central banks, we find evidence supporting the following predictions: Delegation is more likely to enhance credibility and political replacements of central bank governors are less likely in the presence of multiple political veto players; this effect increases with the polarization of veto players.
UR - http://www.scopus.com/inward/record.url?scp=0141574246&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0141574246&partnerID=8YFLogxK
U2 - 10.1017/S0003055403000777
DO - 10.1017/S0003055403000777
M3 - Article
AN - SCOPUS:0141574246
VL - 97
SP - 407
EP - 423
JO - American Political Science Review
JF - American Political Science Review
SN - 0003-0554
IS - 3
ER -