ANALYSIS OF POLITICAL INSTITUTIONS AND CENTRAL BANK TRANSPARENCY IN SELECTED AFRICAN COUNTRIES

Abstract

Studies on central bank transparency focus on effect of central bank transparency rather than causes or determinants of central bank transparency. This paper empirically examined the impact of different measures of political institutions on central bank transparency. A panel data of twenty-two African countries was gathered over a period 2006 to 2018. Driscoll and Kraay method was used to gauged the model. The findings revealed that central bank transparency increases as quality of political institutions improve. The paper recommended that political institutions should be reformed to allow: (i) citizens participation in public decision making, (ii) equal opportunity for all including minority and women in political participation, (iii) restriction on exercise of executive powers, and (iv) adherent to the basic component of rule of law, principle of checks and balances, as well as true separation of power among the arms of government.