TRAPS IN THE MEASUREMENT OF INDEPENDENCE ANDACCOUNTABILITY OF CENTRAL BANKS

Measures of central banks' independence and central banks' accountability which are basedon an interpretation of their statutes provide, in themselves, no guidance for the assessmentof legislative proposals. In the effectiveness of monetary policy, the crucial considerationsrelate to how central banks and other policymakers behave. The pattern of incentives is notdetermined by the statutes, which may be wholly irrelevant, and therefore one cannotdiscover the effectiveness of policy by inspecting the statutes. On the other hand, anassessment of the democratic acceptability of an arrangement requires a normativeargument. Depending on that argument, statutory characteristics may be the crucial ones, butfor the assessment to be worthwhile, the argument must be explicit....