Publication:
Central Bank Independence and Sovereign Borrowing

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dc.contributor.authorAthanasopoulos, Angelos
dc.contributor.authorFraccaroli, Nicolò
dc.contributor.authorKern, Andreas
dc.contributor.authorRomelli, Davide
dc.date.accessioned2025-07-25T18:51:55Z
dc.date.available2025-07-25T18:51:55Z
dc.date.issued2025-07-25
dc.description.abstractThis paper studies the impact of central bank independence on sovereign borrowing, using an index that captures institutional constraints on central bank lending to the government across 155 countries from 1972 to 2023. The findings show that tighter lending to the executive significantly reduces sovereign interest rates and raises the debt-to-gross domestic product ratio in developing countries. These effects reflect the executive’s improved ability to borrow at lower costs under greater central bank independence. The results are robust to multiple tests, but there are no significant effects in advanced economies. From a policy perspective, the results highlight the key role of independent central banks as catalysts for reducing governments’ borrowing costs and enhancing the government’s borrowing capacity.en
dc.identifierhttps://openknowledge.worldbank.org/entities/publication/6319a906-2be2-474a-a02d-487b523a8226
dc.identifier.doihttps://doi.org/10.1596/1813-9450-11179
dc.identifier.urihttps://hdl.handle.net/10986/43506
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 11179
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectCENTRAL BANK INDEPENDENCE
dc.subjectGOVERNMENT DEBT
dc.subjectINTEREST RATE
dc.subjectSOVEREIGN LENDING
dc.subjectCENTRAL BANK GOVERNANCE
dc.titleCentral Bank Independence and Sovereign Borrowingen
dc.typeWorking Paper
dspace.entity.typePublication
okr.date.disclosure2025-07-25
okr.date.doiregistration2025-07-27T02:11:21.019258Z
okr.date.lastmodified2025-07-25T17:04:47Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099216207252528618
okr.guid099216207252528618
okr.identifier.docmidIDU-8396d2be-9319-4c32-a2a8-506e72f62e86
okr.identifier.doi10.1596/1813-9450-11179
okr.identifier.externaldocumentum40034170
okr.identifier.internaldocumentum40034170
okr.identifier.reportWPS11179
okr.import.id8068
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099216207252528618/pdf/IDU-8396d2be-9319-4c32-a2a8-506e72f62e86.pdfen
okr.region.geographicalWorld
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicFinance and Financial Sector Development::Financial Regulation & Supervision
okr.topicGovernance::Governance and the Financial Sector
okr.topicFinance and Financial Sector Development::International Financial Markets
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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