Political economy of central banks

Current developments in the field of comparative political economy have emphasised the role and influence of corporatist institutions in the determination of levels of economic and social performance. Without denying the importance of corporatism, the paper argues for the need to acknowledge and examine the impact of other institutions, such as central banks, on economic performance. Given the increasing role of monetary policy in fashioning economic development, central banks have assumed a key economic and political role in policy formation. Against this background, the paper explores the theoretical and empirical implications of central bank independence, and suggests that a greater emphasis should be placed on the nature and type of central bank independence and on the institutional linkages between central banks and other state institutions.     

太平洋战争爆发后伪满的金融统制

太平洋战争爆发后,中国东北地区成为日本战争经济所需的重要战略物资的供给基地。为满足日本的战争需要,伪满政权采取了一系列金融管制措施,使得日伪在中国东北地区的金融统制较此前更加严酷。本文从统一汇兑巩固“元元等价”、统制资金促进战争产业发展、强制储蓄直接剥夺劳动收入、管制利率强迫共同融资削弱金融机构经营自主权、改革《满洲中央银行法》消除央行独立性等角度全面分析太平洋战争爆发后日伪如何强化对中国东北地区的金融统制。     

The West African Medical Staff and the Administration of Imperial Tropical Medicine, 1902–14

The reaction of British business to the decolonisation of the Empire has been the focus of much recent research, but few studies have shed light on the continued presence of commercial activities after independence. Barclays Bank DCO in Nigeria began indigenising its staff during decolonisation, but this process was far from complete at independence. African managers at Barclays were supposed to continue British banking traditions, while the post-colonial state hoped to gain more influence on foreign investment through the Nigerianisation of management. By the time the Nigerian civil war effectively ended in 1969 Barclays was only just beginning to come to terms with the ability and ‘character’ of its Nigerian managers, while the Nigerian state was moving towards more radical policies to control foreign business. This article aims to highlight the importance of Africanisation programmes for the structure and control of a major British bank trying to adapt first to the end of Empire and then to the post-colonial world.     

The money tree: Exploring central bank digital currency blockchain imaginaries

Central banks worldwide are developing, piloting and launching new central bank digital currencies (CBDCs). As the hub for the central banking community, the Bank for International Settlements (BIS) promotes a curiously botanical CBDC imaginary. From ‘money flowers’ to ‘tree trunks’ and a ‘strong canopy’, This helps to naturalize CBDC without clarifying its sociopolitical implications or envisioned monetary future, such as geopolitical tensions and financial fragmentation, new modes of financial interaction or the strengthened role of central banks. While omitting the paradoxes and ambivalences of CBDC, the imaginary of the BIS structures the enfolding discourses and allows the bank to function as a think tank for financial policy-making.     

Can South–South Cooperation Compete? The Development Bank of Latin America and the Islamic Development Bank

Southern‐led multilateral development banks (MDBs) play a key role in harnessing global capital to finance the sectors most important to borrowers, especially infrastructure. Two prominent Southern MDBs, the Development Bank of Latin America (CAF) and the Islamic Development Bank (IsDB), have become crucial drivers of regional infrastructure growth. This article explores whether their performance has lived up to their goals of establishing borrower control over bank governance without sacrificing financial dynamism. Using power‐weighted voting indices for member representation on bank boards, the authors determine that these banks offer borrowers much more representation on their boards than do their Northern‐based counterparts, the Inter‐American Development Bank (IDB) and the World Bank International Bank for Reconstruction and Development (IBRD). The article also analyses bank operations to determine whether their governance structure impacts their internal performance, as reflected on balance sheets, and external performance — gaining relevance in development finance and particularly in infrastructure lending, including the burgeoning sector of sustainable (climate‐resilient) infrastructure. The authors find that the CAF and IsDB have become major players in development finance, including in sustainable infrastructure. However, important issues remain in relation to their continued internal capacity development, especially with regard to the environmental and social safeguards necessary to oversee lending.     

The Regulatory State and Turkish Banking Reforms in the Age of Post‐Washington Consensus

The new era of the Post‐Washington Consensus (PWC), promoted under the auspices of International Financial Institutions such as the International Monetary Fund and the World Bank, centres on the need to develop sound financial regulation and strong regulatory institutions, especially in the realm of banking and finance in post‐financial crisis developing countries. This article uses an examination of the Turkish banking sector experience with the PWC in the aftermath of the 2001 financial crisis to show its considerable strengths and weaknesses. The authors argue that the emergent regulatory state in the bank‐based financial system has a narrow focus on strengthening prudential regulation, whilst ignoring the increased ‘financialization’ of the Turkish economy. They identify the positive features of the new era of the PWC in terms of prudential regulation, which has become much more robust in its ability to withstand external shocks. At the same time, however, the article highlights some of the limitations of the new era which resemble the limitations of the PWC. These include the distributional impact of the regulatory reforms within the banking sector, and notably the emergence of foreign banks as the major beneficiaries of this process; weaknesses in promoting productive bank intermediation that finance the real economy and economic growth, leading to poverty reduction via growth of employment whilst stimulating financialization within the economy; and finally, the exclusive focus on prudential regulation, whilst ignoring regulatory costs, consumer protection and competition regulation.     

‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance

Multilateral development banks (MDBs) are one of the most popular forms of international organization, with at least 27 operating in the world today. Although most academics and policy makers focus on the World Bank and major regional MDBs, the majority of MDBs are in fact relatively small, and controlled by developing as opposed to industrialized countries. How do the differing governance arrangements of these ‘minilateral’ development banks (MnDBs) impact their operations? This article takes the Trade and Development Bank (TDB), an MDB in Africa with 22 regional member countries, as a case study to consider this question. Based on an analysis of TDB's track record since 2005 and interviews with management and shareholders, the author finds that borrower‐led governance leads to substantial disadvantages in terms of access to finance. Borrower‐led governance permits TDB and other MnDBs greater operational flexibility, which partially compensates for this financial disadvantage, but these operational strategies come with trade‐offs in terms of developmental effectiveness. The findings suggest that MnDBs have substantial latent potential and, in an increasingly multipolar world, they are likely to grow in coming years. However, MnDBs need to ensure that their developmental value added is strengthened in step with their financial power.     

In the Eye of the Storm: Sri Lanka's Front‐Line Civil Servants in Transition

This article narrates how bureaucrats in eastern Sri Lanka operated during and after the war. They managed to keep minimal state services running whilst being locked between the government and the insurgent Liberation Tigers of Tamil Eelam (LTTE). When the government defeated the LTTE in 2009, civil servants were freed from rebel coercion, but they also lost their counterweight against unappreciated policies from the capital and interference by local politicians. The article links the thinking on armed conflicts with the literature that conceptualizes ‘the state’ not as a coherent entity, but as a subject of continuous negotiation. The state's insigne provides a sense of legitimacy and supremacy, but governments have no monopoly on using it. Other powerful actors capture state institutions, resources and discourse for contradictory purposes. This perspective helps us reconcile the appearance of bureaucratic order with the peculiar and hybrid forms of rule that emerged in the war between rebels and government, and it sheds light on some of the surprising changes and continuities that occurred when that war ended. Public administration is neither just a victim of war, nor plainly a victor of the post‐war situation.     

四联总处对战时银行机构的法律监管

抗日战争时期国民政府的最高金融机构——“四联总处”通过一系列立法活动加紧对银行机构设置、业务范围及业务检查等工作实施监管。监管目的在于维持战时金融经济运行的稳定,保障战时国家财政经济的金融需求,有意强化中央银行职能,以建立国民政府的金融垄断体制,对战时中国金融经济产生了积极的影响。但是,受国民政府实行的多元化银行监理体制的影响,机构设置重叠,事权未能统一,四联总处对银行的监管力度与监管实效明显不足,致使战时通货膨胀日益加剧。     

新中国中央银行职能的法规诠释

1948年12月中国人民银行成立以来,作为中央银行,负有"发行的银行"、"政府的银行"、"银行的银行"三大基本职能。为完善人民银行这三大职能,中央政府在法规方面逐渐加强建设,从仅在政府组织法体现人民银行央行职能到改革开放后出台强化人民银行央行职能的条例,最终在20世纪末出台了专门的单行法——《中华人民共和国中国人民银行法》以及2003年的修订本,并为此制定了相应的行政法规与金融规章,构楚了我国中央银行法律体系的基本框架。在法规日渐完善的同时,人民银行在国民经济的宏观调控中发挥着越来越重要的作用。     

Unsocial Sociability in the Scottish Enlightenment: Ferguson and Kames on War,Sociability and the Foundations of Patriotism

Summary

This article reconstructs a significant historical alternative to the theories of ‘cosmopolitan’ or ‘liberal’ patriotism often associated with the Scottish Enlightenment. Instead of focusing on the work of Andrew Fletcher, Francis Hutcheson, David Hume or Adam Smith, this study concentrates on the theories of sociability, patriotism and international rivalry elaborated by Adam Ferguson (1723–1816) and Henry Home, Lord Kames (1696–1782). Centrally, the article reconstructs both thinkers' shared perspective on what I have called ‘unsociable’ or ‘agonistic’ patriotism, an eighteenth-century idiom which saw international rivalship, antagonism, and even war as crucial in generating political cohesion and sustaining moral virtue. Placing their thinking in the context of wider eighteenth-century debates about sociability and state formation, the article's broader purpose is to highlight the centrality of controversies about human sociability to eighteenth-century debates about the nature of international relations.     

International development in transition

International development is in a period of transition. While the outcome of this is still unclear, this article argues that there are at least four areas in which the project of international development is changing. First, there is a debate, especially within the World Bank, about development strategy and how we think about development, particularly in terms of the balance between states and markets. This is evident in the debate over state failure and the new structural economics. Second, there is increasing evidence of a shift in lending, away from projects of ‘small’ human development, perhaps best encapsulated by the United Nations Millennium Development Goals, towards more transformative ‘big’ development projects such as infrastructure. Third, ‘non‐traditional’ aid donors and new forms of private philanthropy are playing a more significant role in development financing and this, in turn, offers developing countries a new range of choices about what kinds of development assistance they receive. Fourth, aid relations are changing as a result of the renewed agency of developing states, particularly in sub‐Saharan Africa, and shifts towards increased South–South cooperation are growing as evidenced by increased funding from regional development banks and increased trade flows. The article reviews these changes and suggests a series of questions and challenges that arise from them for analysts of international development, developing countries and traditional aid donors.     

To not reinstate the past:

Abstract

Most interpretations stress a qualitative shift in colonial policy at the end of World War II, reflecting a major reorientation of outlook towards development, welfare and ultimately independence. There are, however, continuities before and after the war that call for a shift of emphasis.

Because the British Solomon Islands Protectorate is conventionally represented as an extreme case of backwardness and severity before the war, it should present the putative contrast sharply. On the contrary, the pre-war administration field staff had aspirations for a more progressive regime, but these were thwarted by the protectorate's poverty and were shelved by the eruption of the war. The war-time destruction prompted administrators to consider afresh the problems of colonial development, coinciding with Colonial Office demands for post-war development submissions. Proposals proved too ambitious for the limited imperial purse, but even the attenuated plans proved unrealistic given the acute shortages of material and human resources.

Thus, while ‘post-war thinking’ began well before the war, the era of ‘post-war development’ could not properly begin until several years after the end of the war.     

The Signing of the Sino-Iranian Treaty of 1920

This article looks at the efforts China and Iran made towards strengthening themselves and their search for independence and integrity after the First World War. Since the nineteenth century, the two countries had been in a similar situation, under pressure from treaties and rivalries with European powers. The change of the world order brought about by the 1914–18 war created an opportunity for China and Iran to claim back their rights, such as ending extra-territoriality. After the war, the Fourteen Points drawn up by the American president, Woodrow Wilson, gave hope for China and Iran to maintain their independence and integrity. During the Paris Peace Conference of 1919, China and Iran made both gains and losses. China was unable to solve the Shandong Problem but became one of the founding members of the League of Nations, while Iran did not get access to the Peace Conference but obtained Britain’s assurance of independence and integrity by signing the Anglo-Iranian Treaty of 1919, and then joined the League of Nations. China and Iran attempted to bring about cooperation between Asian countries, and therefore signed a treaty in 1920. The significance of the treaty was that the two countries agreed not to grant extra-territoriality to each other, which was what both countries were seeking to achieve at that time.     

Brave New Words? A Critique of Stiglitz’s World Bank Rethink

While in the position of Chief Economist of the World Bank, Joseph Stiglitz produced a string of papers, one of which proposed moving beyond the ‘Washington consensus’ to a ‘new development paradigm’, which he hoped the World Bank would espouse. This article offers a critique of that paper and the premises underlying any attempt to reposition an international banking agency. In particular, it focuses on Stiglitz’s attempt to jettison ‘conditionality’ and his argument that developmental assistance should seek to foster socio‐economic transformation and not be about ‘projects’. It also considers the ramifications of the call to make the World Bank ‘the knowledge bank’. Finally, it highlights what is missing from the proposed paradigm, bearing in mind the World Bank’s new ‘holistic development framework’.     

Quelling inflation: The role of the public

Members of the Monetary Policy Committee (MPC) of the Bank of England seek to subdue inflation using ‘monetary policy’ to regulate the availability of money and credit to the financial system. The central bank ‘policy rate’ is the blunt instrument conventionally employed to affect the pacing of economic activity, stimulating or retarding growth. Credibly explaining that the rise in interest rates – the ‘tightening’ of monetary policy – underway at the moment will continue suppressing demand for goods and services until an inflation target of around 2 per cent is achieved is the emphatic message the bank seeks to convey. Such intentionally destructive and potentially brutal interventions are the critical aim of current bank policy. This article demonstrates how the design of the contemporary monetary regime, which presents itself unequivocally as the outcome of macroeconomic developments, can be recast in anthropological terms, thus revealing the role of the public in the unfolding monetary drama.     

Books Received

In this article, I discuss the role of the three Scandinavian central banks in the establishment of the Bank for International Settlements (BIS) in 1930, and in the international lender of last resort operation towards Austria in 1931. I argue that small central banks were reluctant supporters in the establishment of the BIS and free riders in the Austrian crisis, even though there were marked differences in their attitude to international cooperation. These results run counter to the views of those International Political Economy (IPE) theorists who argue that small states should be in favour of international cooperation. On the other hand, the evidence seems to confirm Kindleberger's hypothesis that small countries were free riding during the international financial crisis of 1931, and that therefore there is a need for some coordinating mechanism, or a hegemon, in such crises.     

Origins of State Housing Policy in Canada: the Case of the Central Mortgage Bank

In the literature, Canadian federal housing policy is most often considered to be a post-Second World War phenomenon and to have been effectively initiated, at least in an institutional sense, with the establishment of Central Mortgage and Housing Corporation (chmc) in 1945 (Bettison, 1975; Hatch. 1975; Rose, 1980). It is generally accepted that the state was led to intervene in the private housing market as a result of an unprecedented demand from returning servicemen. This demand was heightened by increasing levels of disposable income and exacerbated by reduced levels of housing production during the war. In this scenario. the state is seen to have been responding to a specific market crisis; the response resulted in the creation of various agencies, most notably cmhc, and in National Housing Act amendments, virtually all of which took place in the post-war era. The ‘market-crisis’ perspective to the study of federal housing policy tends to overlook the initiation of state monetary and credit system management during the 1930s and its implications for the form of state intervention in housing during the 1940s and beyond. I wish to make a case here for pushing back the study boundaries to at least the early 1930s in conjunction with a brief examination of the Central Mortgage Bank (cmb). The argument is that the essential ‘actors’ in the determination of housing policy at the federal level (i.e. the Department of Finance, the institutional lenders [particularly the insurance companies], and the provinces) came to be delineated in the 1930s around the issue of debt management in the wake of widespread mortgage default, especially in the rural districts of the prairie provinces. The cmb, although never becoming active, is seen here as the first substantial collaboration between the state and finance capital in the area of residential mortgage lending practices. It represents an additional facet of state monetary and credit system management that proceeded apace with the formation of the Bank of Canada in 1935.     

The Virtue Ethic Difference in the Just War Discourse of James Turner Johnson and Catholic Social Teaching

Abstract

In this article, I investigate how incorporating virtue ethics into the process of interpreting and responding to conflict re-shapes the understanding and application of just war theory. More specifically, I analyze James Turner Johnson's idea of just war and the implications of Thomistic virtue ethics. My argument in this article is that Johnson's rule-based idea of just war theory lacks the more integrated virtue ethic, which we find in Thomas and in the re-appropriation of Thomistic virtue ethics in contemporary Catholic Social Teaching's discourse on just war. This contributes to Johnson's idea of just war being inconsistent with the direction of contemporary Catholic Social Teaching on just war theory, particularly regarding the presumption against war. His lack of a virtue ethic also contributes to an inadequate understanding, development, and application of basic just war criteria, particularly from a Catholic perspective.