Governor appointments and central bank Independence by Vasso Ioannidou, Sotirios Kokas, Thomas Lambert, Alexander Michaelides published by VOXEU (2/2023)
Countries around the world have reformed the legal framework governing their central banks to increase operational independence. This column provides evidence that over the past decades, appointments of central bank governors have become more politically motivated, especially following significant legislative reforms aimed at insulating central banks and their governors from political interference. Politically motivated appointments reflect lower de facto independence and are associated with worse inflation and financial stability outcomes.
