Polillo, Simone, & Guillén, Mauro. (2005). "Globalization Pressures and the State: The Worldwide Spread of Central Bank Independence". American Journal of Sociology, 110(6), 1764-1802. http://www.journals.uchicago.edu/doi/abs/10.1086/428685
“We agree that globalization has shifted power around the state. The existing literature, however, has not empirically explored the mechanisms that account for such a shift…The goal of this article is to analyze theoretically and empirically the impact of globalization on specific state structures, controlling for domestic macroeconomic and political characteristics” (1766). Specifically, this article examines central bank independence and its role as a response to the effects of globalization.
This article then goes on to examine the role of the central bank, and why CBI is an increasingly important phenomena. “…we focus our theoretical analysis on the impact of global institutional forces on central bank independence. We examine two types of effects: 1.) international coercive pressures that affect countries, including their dependency on foreign trade, investment and multilateral lending; and 2.) cross-national international influences that operate through the network of bilateral trade ties in the form of cohesion and role equivalence effects” (1773).
Three hypotheses are then put forth: “the greater the exposure to foreign trade, foreign investment or multilateral lending, the more independent the central bank” (1776). “The more a given country trades with other countries with an independent central bank, the more independent its own central bank because of normative pressure” (1778). “The more a country competes in trade against third countries with an independent central bank, the more independent its own central bank” (1780)
They then deploy a quantitative method to try to answer these three hypotheses. The dependent variable is a measure of CBI. The independent variables are many. I fear they suffer from a problem of multicolliniarity.
“Our results indicate that international coercive, normative and mimetic pressures explain the adoption of central bank independence, lending support for each of our hypotheses” (1788).
“The purpose of this article was to examine the impact of globalization on the state, using the specific case of the central bank and its independence from the executive branch as the empirical setting…We argued that, be cause of cross-national economic, political, and cultural competition in a context of globalization, the state is subject to coercive, normative and mimetic pressures. In response to these pressures, the state reorganizes itself, with a strong tendency toward emulating the organizational forms and practices adopted by other countries…Thus, globalization is transforming the state structures that deal with monetary policy” (1793).
