| Description: |
This paper explores a profound puzzle - why did relatively independent, Western-style central banks develop so quickly in post-communist democracies? I argue that this has occurred primarily because of the intensive efforts of a transnational community of central bankers in Western Europe and North America. I investigated this phenomenon through a broad analysis of central bank development in 19 post-communist countries, and through intensive interview and survey research in Hungary, the Czech Republic, Russia, and Kyrgyzstan. The first conclusion is that the active, extensive training and technical assistance efforts of the Western central banking community have been the most significant cause of convergence in economic ideologies, basic techniques and practices, and internal organizational frameworks in post-communist central banks. Second, internationally generated convergence has not led to a similar convergence in domestic economic results. In sum, this study reveals both the possibilities and the limitations of externally driven institutional transformation.
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