The Same, but Different. Central Banks, Regulatory Agencies, and the Politics of Delegation to Indep
The Same, but Different. Central Banks, Regulatory Agencies, and the Politics of Delegation to Indepent Authories02/11/2005 | 15:30Sala Seminario - Planta Baja IBEIFabrizio GilardiUniversité de LausanneDelegation to independent central banks and to independent regulatory agencies is similar in many respects. In both cases, agents are deliberately made more independent from political principals through a specific institutional design. Moreover, it has been argued that delegation to both central banks and regulatory agencies is linked to the need for policymakers to improve the credibility of policy commitments, to the wish of incumbent politicians to tie the hands of future majorities, and to the extent to which the institutional contexts safeguards policy stability. Through an analysis of the formal independence of central banks and regulatory agencies in Western Europe this article identifies a series of empirical puzzles that cast doubts on the validity of current explanations. Veto players and the uncertainty of incumbent policy-makers with respect to their re-election prospects matter both for delegation to central banks and regulatory agencies, but in opposite ways. Making sense of these anomalies is necessary to achieve a better understanding of delegation to independent authorities.