Does Social Trust Speed up Reforms? The Case of Central-Bank Independence

Arbeitspapier

Many countries have undertaken central-bank independence reforms, but the years of implementation differ. What explains such differences in timing? This is of interest more broadly, as it sheds light on factors that matter for the speed at which economic reforms come about. We study a rich set of potential determinants, both economic and political, but put special focus on a cultural factor, social trust. We find empirical support for an inverse u-shape: Countries with low and high social trust implemented their reforms earlier than countries with intermediate levels. We make use of two factors to explain this pattern: the need to undertake reform (which is more urgent in countries with low social trust) and the ability to undertake reform (which is greater in countries with high social trust).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 1053

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies ; Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
• Subject: Central banks ; Independence ; Social trust ; Inflation ; Monetary policy ; Reform

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berggren, Niclas ; Daunfeldt, Sven-Olov ; Hellström, Jörgen
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/109085
• Last update: 10.03.2025, 11:41 AM CET