Central Bank Independence in Transition Economies

3. Central Banks in Transition Economies 

This chapter provides an analysis of the legal CBI in transition economies and its 

influence on inflation performance. The first section presents the history and specific 

features of the Central Banking in post communist countries. Next section describes 

previous studies on CBI in Central Europe and the former Soviet Union. Indices of 

political and economic independence based on GMT methodology are derived next. 

The relation between CBI and overall transformation progress are presented in section 

4. Then the possible determinants of the Banks' independence are analysed. In the next 

section some comparisons of the inflationary performance in the countries under 

investigation are offered. The relationship between inflation and CBI is examined in 

the next two sections. Finally, some conclusions are given.