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National representation in supranational institutions: The case of the European Central Bank

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  • Badinger, Harald
  • Nitsch, Volker

Abstract

Supranational institutions face an important trade-off when hiring personnel. On the one hand, hiring decisions are based, as in most organizations, on a candidate’s professional qualifications. On the other hand, supranational institutions often aim for broad national representation. Reviewing evidence from the European Central Bank, we show that nationality is indeed relevant for both hiring and decision-making. Specifically, we find a disproportionately narrow spread of national representation in the top management of the ECB. Further, there is evidence for the existence of national networks between adjacent management layers. Finally, monetary policy decisions seem to be linked to national representation in the core business areas of the ECB. Examining a sample of 27 European countries over the period from 1999 to 2008, we estimate Taylor rules for alternative sets of euro area aggregates derived from different weighting schemes of national macroeconomic data. Our results indicate that weights based on national representation in the mid-level management of the ECB’s core business areas best describe the central bank’s interest-rate setting behavior.

Suggested Citation

  • Badinger, Harald & Nitsch, Volker, 2014. "National representation in supranational institutions: The case of the European Central Bank," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 19-33.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:19-33
    DOI: 10.1016/j.jce.2013.05.007
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    Cited by:

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    2. Matthias Neuenkirch & Peter Tillmann, 2016. "Does A Good Central Banker Make A Difference?," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1541-1560, July.
    3. Harald Badinger & Volker Nitsch, 2019. "What Do Central Bankers Do? Evidence from the European Central Banks' Executive Board," CESifo Working Paper Series 7467, CESifo.
    4. Gnan, Phillipp & Rieder, Kilian, 2023. "The (not so) quiet period: Communication by ECB decision-makers during monetary policy blackout days☆," Journal of International Money and Finance, Elsevier, vol. 130(C).
    5. Rieder, Kilian, 2022. "Monetary policy decision-making by committee: Why, when and how it can work," European Journal of Political Economy, Elsevier, vol. 72(C).
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    7. Andreas Dür & Christoph Moser & Gabriele Spilker, 2020. "The political economy of the European Union," The Review of International Organizations, Springer, vol. 15(3), pages 561-572, July.
    8. Hamza Bennani & Matthias Neuenkirch, 2017. "The (home) bias of European central bankers: new evidence based on speeches," Applied Economics, Taylor & Francis Journals, vol. 49(11), pages 1114-1131, March.

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    More about this item

    Keywords

    Organization; Central bank; Nationality; Monetary policy;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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