Thursday, March 16, 2006
ECB WATCH. THE EUROPEAN CENTRAL BANK AND EUROPE'S "MIXED CONSTITUTION"
. Werner Bonefeld: "Europe, the Market and the Transformation of Democracy", Journal of Contemporary European Studies, Vol. 13, No. 1, 93-106, April 2005
In his discussion of EMU and ECB independence, Werner Bonefeld argues that the European Union is "characterised by a mixed constitution". Not that he favors such an arrangement: a mixed constitution, in his view, is the proper form of a "bourgeois state" in which the people are not sovereign.
Beyond Mr. Bonefeld's politics, what's relevant here is the checks and balances approach to the European Central Bank. In a June 2000 paper, Philip Keefer and David Stasavage argued that central bank independence does indeed yield low inflation rates, but only in the context of political checks and balances (*).
Watching Argentina's recent inflation troubles, it seems that they do have a point. In spite of what Bonefeld calls the EU's "democratic deficit", a mixed constitution is, perhaps, not such a bad thing after all.
(*) Philip Keefer & David Stasavage: "Bureaucratic Delegations and Political Institutions: When Are Independent Central Banks Irrelevant?", World Bank, June 2000.
. Werner Bonefeld: "Europe, the Market and the Transformation of Democracy", Journal of Contemporary European Studies, Vol. 13, No. 1, 93-106, April 2005
In his discussion of EMU and ECB independence, Werner Bonefeld argues that the European Union is "characterised by a mixed constitution". Not that he favors such an arrangement: a mixed constitution, in his view, is the proper form of a "bourgeois state" in which the people are not sovereign.
Beyond Mr. Bonefeld's politics, what's relevant here is the checks and balances approach to the European Central Bank. In a June 2000 paper, Philip Keefer and David Stasavage argued that central bank independence does indeed yield low inflation rates, but only in the context of political checks and balances (*).
Watching Argentina's recent inflation troubles, it seems that they do have a point. In spite of what Bonefeld calls the EU's "democratic deficit", a mixed constitution is, perhaps, not such a bad thing after all.
(*) Philip Keefer & David Stasavage: "Bureaucratic Delegations and Political Institutions: When Are Independent Central Banks Irrelevant?", World Bank, June 2000.
# posted by Agustin @ 12:30 AM 
