Efficiency in European Central Banks: The Role of Economic Freedom

Abstract

The analysis of the efficiency of central banks has become a main topic of management and political strategies in the banking sector. This paper applies a non-parametric approach with random in order to analyze the efficiency of European central banks during the period 2010-2012. We analyzed the effect that the dimensions of the so-called Economic Freedom have in the sample of OCDE countries. The results show that central banks could increase their efficiency by enforcing policies to reduce the perception of corruption, the performance of an adequate regulatory financial system, the strengthening of rights and economic progress.