Abstract
Politicians in office often delegate authority over some areas of policy to partly independent institutions within the public sector. This paper takes the view that delegation is used as a partial commitment device. By specifying the objectives of an institution more or less tightly and by giving it broader or narrower powers, politicians determine the extent of commitment to a policy rule. The wider the set of contingencies over which the rule is binding, the stronger the commitment. This set is wider and an institution more independent the more politically costly it is, for the political principals, to override the decisions of the institution. Hence a public institution with broader power in a particular area of policy corresponds to a stronger commitment to given restrictions on policy in this area.
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© 1994 Springer Science+Business Media Dordrecht
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Cukierman, A. (1994). Commitment through Delegation, Political Influence and Central Bank Independence. In: De Beaufort Wijnholds, J.O., Eijffinger, S.C.W., Hoogduin, L.H. (eds) A Framework for Monetary Stability. Financial and Monetary Policy Studies, vol 27. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-0850-8_7
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DOI: https://doi.org/10.1007/978-94-011-0850-8_7
Publisher Name: Springer, Dordrecht
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