Political institutions and Central Bank independence: A cross-country analysis

Using three quantitative measures of Central Bank independence, we apply OLS and TSLS regression methods to investigate the possible correlation between political liberty, political instability and central bank independence. For a sample of Western democracies and highly democratic developing countries we show that Cukierman's legal independence index is positively correlated with political freedom and regime political stability. It is negatively correlated with party political stability. For a sample of developing countries that excludes dictatorships we show that a special index of legal central bank autonomy is positively associated with political freedom and political stability. Finally, we observe that, for the same sample of nations, the turnover index of central bank independence is not sensitive to our political variables.     

Creating Surplus Labour: Neo-Liberal Transformations and the Development of Relative Surplus Population in Indonesia

ABSTRACT

Many among the world’s population are surplus to the requirements of capital accumulation. These are people who become engaged in precarious employment both in rural and urban contexts and those who are involuntarily unemployed. Their presence has been particularly acute in “peripheral countries.” Mainstream economic literature explains this in terms of the dual labour market, where it is argued that surplus labour will eventually disappear with market-led economic development. Contrary to this explanation, this article argues, using Marx’s concept of relative surplus population (RSP), that under the existing neo-liberal framework such labour vulnerability is continually being created. This article charts the developmental history of Indonesia and demonstrates that the growth of RSP is an outcome of a neo-liberal transformation which favours capital accumulation at the service of global markets. Neo-liberal adjustments shape the development of RSP in three related ways. First, the adjustments change class relations and transform state orientation. Second, the reconfiguration of class dynamics and the state shapes the model of accumulation. Third, the model of accumulation eventually affects the size of RSP. It is argued that the disconnection between the domestic agricultural development and industrialisation has contributed to the maintenance of a large RSP in Indonesia.