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National Representation in Multinational Institutions: The Case of the European Central Bank

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  • Harald Badinger
  • Volker Nitsch

Abstract

Multinational 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, multinational 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 identify various country-specific features that determine 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 14 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

  • Harald Badinger & Volker Nitsch, 2011. "National Representation in Multinational Institutions: The Case of the European Central Bank," CESifo Working Paper Series 3573, CESifo.
    • Handle: RePEc:ces:ceswps:_3573
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. “The Italian Job” – Die EZB und ihre Lebenslüge
      by Olaf Storbeck in Handelsblog on 2011-11-01 15:20:39
    2. The Italian Job – How Passports Influence Monetary Policy Decisions
      by Olaf Storbeck in Economics Intelligence on 2011-11-01 19:47:39

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    1. repec:ces:ifodic:v:10:y:2012:i:1:p:18175040 is not listed on IDEAS
    2. repec:ces:ifodic:v:10:y:2012:i:1:p:18174973 is not listed on IDEAS
    3. Bernd Hayo & Guillaume Méon, 2012. "Why Countries Matter for Monetary Policy Decision-Making in the ESCB," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(1), pages 21-26, 04.
    4. Jürgen Stark & Alexander Jung & Francesco Paolo Mongelli, 2012. "Normal Times versus Crisis Times," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(01), pages 03-08, April.
    5. Bernd Hayo & Guillaume Méon, 2012. "Why Countries Matter for Monetary Policy Decision-Making in the ESCB," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(01), pages 21-26, April.
    6. Harald Badinger & Volker Nitsch, 2012. "Supranationalism in Monetary Policy Decision-Making," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(1), pages 27-31, 04.
    7. repec:bre:polbrf:node_8103 is not listed on IDEAS
    8. Harald Badinger & Volker Nitsch, 2012. "Supranationalism in Monetary Policy Decision-Making," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(01), pages 27-31, April.
    9. repec:ces:ifodic:v:10:y:2012:i:1:p:18176872 is not listed on IDEAS
    10. Jürgen Stark & Alexander Jung & Francesco Paolo Mongelli, 2012. "Normal Times versus Crisis Times," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(1), pages 03-09, 04.
    11. repec:ces:ifodic:v:10:y:2012:i:1:p:03-08 is not listed on IDEAS

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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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