Central banking, democratic governance and political authority: the case of Brazil in a comparative perspective

Banco central, governança democrática e autoridade política: o caso do Brasil em uma perspectiva comparativa

ABSTRACT

By examining the relationship between democratic governance and monetary authority this paper accomplishes two principal tasks. First, it justifies placing the study of monetary authority as a central item on the research agenda of political scientists. Beginning from the premise central banks constitute a special mode of political authority, we examine trade-offs between questions of transparency, democratic accountability, and public sector efficiency. Second, by conducting an empirical study of monetary authority for the Brazilian case, the paper inverts a commonly held assumption within the study of central banks. Rather than argue price stability follows from an autonomous central bank, the Brazilian case demonstrate nearly the opposite can take place.

KEYWORDS:
Central bank; central bank autonomy; monetary policy; political economy; accountability