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34 Comp. Pol. Stud. 3 (2001)

handle is hein.journals/compls34 and id is 1 raw text is: 

















This article builds on previous work examining the incentives facing authoritarian elites to use
central bank reform to constrain the economic policy choices of future governments. It suggests
that because creating an autonomous agency is costly, authoritarian elites will only cede policy-
making powers to an independent body commensurate with the degree of democratic threat that
they face. When a transition is looming, insulation should be complete so as to tie the hands of
successor governments to the greatest extent possible. But when this risk of replacement is
milder, incumbent elites will be careful to design rules that continue to afford them some margin
of maneuver as long as they remain in office. The Mexican central bank reform of 1993 is used as
an illustration of the partial insulation strategy at work.






                                      DEMOCRATIZATION

                                   AND INSTITUTIONAL

                                     CHANGE IN MEXICO

                          The Logic of Partial Insulation




                                                    DELIA M. BOYLAN
                                                    University  of Chicago





T he past decade has witnessed a surge in the number of developing
     countries undertaking reforms  to increase the autonomy of their central
banks.  In Latin America   alone, five countries altered their constitutions
between  1989  and 1993 to increase the central bank's control over monetary
policy. As this trend continues to sweep the continents of Africa, Asia, and
Eastern Europe,  there has been renewed  attention toward understanding  the
causes  and consequences   of central bank independence   in less-developed
countnes.

AUTHOR'S   NOTE: I thank Jorge Buendfa, Jorge Dominguez, Sven Feldmann, Rob Franzese,
Geoffrey Garrett, Lloyd Gruber Jeanne Kinney-Giraldo, and Carlos Perez-Verdua as well as
seminar participants at the University of Chicago, the University of Illinois at Champagne-
Urbana, and the University of Michigan for helpful comments. I am grateful to the Social Sci-
ence Research Council, the Institute for the Study of World Politics, and the Stanford University
Institutefor International Studies for generous financial support. Cesar Veldzquez provided able
research assistance.
COMPARATIVE  POLITICAL STUDIES, Vol. 34 No. 1, February 2001 3-29
D 2001 Sage Publications, Inc.


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