The Political Economy of Central Bank Independence and the Challenges for Development in African Economies

Abstract

This paper surveys the pros and cons of Central Bank Independence and how it could help set developing economies on the path of steady growth. The research develops a theoretical framework for the analysis of central bank independence in budding democracies. The recent trend in Macro- Economic management has resulted in separation of powers between monetary and fiscal authorities with the resultant effect that governments are supposedly held in check regarding their borrowing and spending potential. Can this check be standardized and replicated in emerging democracies where the true values of democracy is yet to be felt or can Central Banks indeed say no to political pressure?