Measuring central bank independence for Vietnam

m in is te r o r m in is te r o f f in an ce ) 0 Pr ov is io ns fo r d is m is sa l o f C EO di ss 1. N o pr ov is io n fo r d is m is sa l 1 2. D is m is sa l p os si bl e on ly fo r n on po lic y re as on s ( e. g. , in ca pa bi lit y or v io la tio n of la w ) 0. 83 3. D is m is sa l p os si bl e an d at d is cr et io n of C B b oa rd 0. 67 4. D is m is sa l f or p ol ic y re as on s a t l eg is la tiv e br an ch ’s d is cr et io n 0. 50 5. U nc on di tio na l d is m is sa l p os si bl e at le gi sl at iv e br an ch ’s di sc re tio n 0. 33 6. D is m is sa l f or p ol ic y re as on s a t e xe cu tiv e br an ch ’s d is cr et io n 0. 17 7. U nc on di tio na l d is m is sa l p os si bl e at e xe cu tiv e br an ch ’s di sc re tio n 0 Is C EO a llo w ed to h ol d an ot he r o ff ic e? of f 1. C EO p ro hi bi te d by la w fr om h ol di ng a ny o th er o ff ic e in go ve rn m en t 1 2. C EO n ot a llo w ed to h ol d an y ot he r o ff ic e in g ov er nm en t un le ss a ut ho riz ed b y ex ec ut iv e br an ch 0. 5 3. L aw d oe s n ot p ro hi bi t C EO fr om h ol di ng a no th er o ff ic e 0 Journal of Economics and Development Vol. 16, No.1, April 201455 Po lic y fo rm ul at io ns W ho fo rm ul at es m on et ar y po lic y? m on po l 1. C B a lo ne h as a ut ho rit y to fo rm ul at e m on et ar y po lic y 1 2. C B p ar tic ip at es in fo rm ul at io n of m on et ar y po lic y to ge th er w ith g ov er nm en t 0. 67 3. C B p ar tic ip at es in fo rm ul at io n of m on et ar y po lic y in a n ad vi so ry c ap ac ity 0. 33 4. G ov er nm en t a lo ne fo rm ul at es m on et ar y po lic y 0 G ov er nm en t d ire ct iv es a nd re so lu tio n of c on fli ct co nf 1. C B g iv en fi na l a ut ho rit y ov er is su es c le ar ly d ef in ed in th e la w as C B o bj ec tiv es 1 2. G ov er nm en t h as fi na l a ut ho rit y on ly o ve r p ol ic y is su es th at ha ve n ot b ee n cl ea rly d ef in ed a s C B g oa ls o r i n ca se o f c on fli ct w ith in C B 0. 8 3. In c as e of c on fli ct fi na l d ec is io n up to a c ou nc il w ho se m em be rs a re fr om C B , l eg is la tiv e br an ch , a nd e xe cu tiv e br an ch 0. 6 4. L eg is la tiv e br an ch h as fi na l a ut ho rit y on p ol ic y is su es 0. 4 5. E xe cu tiv e br an ch h as fi na l a ut ho rit y on p ol ic y is su es , b ut su bj ec t t o du e pr oc es s a nd p os si bl e pr ot es t b y C B 0. 2 6. E xe cu tiv e br an ch h as u nc on di tio na l a ut ho rit y ov er p ol ic y 0 Is c en tra l b an k gi ve n an ac tiv e ro le in th e fo rm ul at io n of go ve rn m en t’s b ud ge t? ad v 1. Y es 1 2. N o 0 C en tr al b an k ob je ct iv es ob j 1. P ric e st ab ili ty m en tio ne d as th e on ly o r m aj or g oa l, an d in ca se o f c on fli ct w ith g ov er nm en t C B h as fi na l a ut ho rit y to pu rs ue p ol ic ie s a im ed a t a ch ie vi ng th is g oa l 1 2. P ric e st ab ili ty m en tio ne d as th e on ly g oa l 0. 8 3. P ric e st ab ili ty m en tio ne d al on g w ith o th er o bj ec tiv es th at d o no t s ee m to c on fli ct w ith p ric e st ab ili ty (e .g ., st ab le b an ki ng ) 0. 6 4. P ric e st ab ili ty m en tio ne d w ith a n um be r o f p ot en tia lly co nf lic tin g go al (e .g ., fu ll em pl oy m en t) 0. 4 5. C B c ha rte r d oe s n ot c on ta in a ny o bj ec tiv es fo r C B 0. 2 6. S om e go al s a pp ea r i n th e ch ar te r, bu t p ric e st ab ili ty n ot o ne o f th em 0 Journal of Economics and Development Vol. 16, No.1, April 201456 Li m ita tio ns o n le nd in g Li m ita tio ns o n ad va nc es lla 1. A dv an ce s t o go ve rn m en t p ro hi bi te d 1 2. A dv an ce s p er m itt ed b ut su bj ec t t o lim its in te rm s o f a bs ol ut e ca sh a m ou nt s o r t o ot he r t yp es o f r el at iv el y st ric t l im its (e .g ., up to 1 5% o f g ov er nm en t r ev en ue s) 0. 67 3. A dv an ce s s ub je ct to re la tiv el y ac co m m od at iv e lim its (e .g ., ad va nc es c an e xc ee d 15 % o f g ov er nm en t r ev en ue s o r a re sp ec ifi ed a s f ra ct io ns o f g ov er nm en t e xp en di tu re s) 0. 33 4. N o le ga l l im its o n ad va nc es ; t he ir qu an tit y su bj ec t t o pe rio di c ne go tia tio ns b et w ee n go ve rn m en t a nd C B 0 Li m ita tio ns o n se cu rit iz ed le nd in g lls 1. N ot p er m itt ed 1 2. P er m itt ed b ut w ith st ric t l im it (e .g ., up to 1 5% o f g ov er nm en t re ve nu e) 0. 67 3. P er m itt ed a nd th e lim its a re lo os e (e .g ., ov er to 1 5% o f go ve rn m en t r ev en ue ) 0. 33 4. N o le ga l l im its o n le nd in g 0 W ho d ec id es c on tro l o f te rm s o f l en di ng ?( 1) ld ec 1. C B c on tro ls te rm s a nd c on di tio ns o f g ov er nm en t b or ro w in g fr om it 1 2. T er m s of C B le nd in g sp ec if ie d in th e la w , o r C B g iv en le ga l au th or ity to se t t he se te rm s 0. 67 3. L aw le av es th e de ci si on a bo ut th e te rm s o f C B le nd in g to go ve rn m en t t o ne go tia tio ns b et w ee n C B a nd e xe cu tiv e br an ch 0. 33 4. E xe cu tiv e br an ch a lo ne d ec id es th e te rm s o f C B le nd in g to go ve rn m en t a nd im po se s t he m o n C B 0 H ow w id e is th e ci rc le o f po te nt ia l b or ro w er s f ro m ce nt ra l b an k? lw id th 1. O nl y ce nt ra l g ov er nm en t c an b or ro w fr om C B 1 2. C en tra l a nd st at e go ve rn m en t a s w el l a s a ll po lit ic al su bd iv is io ns c an b or ro w fr om C B 0. 67 3. In a dd iti on to th e in st itu tio ns m en tio ne d un de r 2 p ub lic en te rp ris es c an b or ro w fr om C B 0. 33 4. C B c an le nd to a ll of th e ab ov e as w el l a s t o th e pr iv at e se ct or 0 T yp e of li m it w he n su ch lim it ex is ts lty pe 1. L im it sp ec ifi ed a s a n ab so lu te c as h am ou nt 1 2. L im it sp ec ifi ed a s a p er ce nt ag e of C B c ap ita l o r o th er lia bi lit ie s 0. 67 3. L im it sp ec ifi ed a s a p er ce nt ag e of g ov er nm en t r ev en ue s 0. 33 4. L im it sp ec ifi ed a s a p er ce nt ag e of g ov er nm en t e xp en di tu re s 0 M at ur ity o f l oa ns Lm at 1. M at ur ity o f C B lo an s l im ite d to a m ax im um o f 6 m on th s 1 Journal of Economics and Development Vol. 16, No.1, April 201457 2. M at ur ity o f C B lo an s l im ite d to a m ax im um o f o ne y ea r 0. 67 3. M at ur ity o f C B lo an s l im ite d to a m ax im um o f m or e th an o ne ye ar 0. 33 4. N o le ga l u pp er b ou nd s o n th e m at ur ity o f C B lo an s 0 R es tri ct io ns o n in te re st ra te s ( 2) lin t 1. In te re st ra te o n C B lo an s m us t b e at m ar ke t r at e 1 2. In te re st ra te o n C B lo an s t o go ve rn m en t c an no t b e lo w er th an a ce rta in fl oo r 0. 75 3. In te re st ra te o n C B lo an s c an no t e xc ee d a ce rta in c ei lin g 0. 50 4. N o ex pl ic it le ga l p ro vi si on s r eg ar di ng th e in te re st ra te o n C B lo an s 0. 25 5. L aw st ip ul at es n o in te re st ra te c ha rg e on g ov er nm en t’s bo rr ow in g fr om th e C B 0 Pr oh ib iti on o n le nd in g in pr im ar y m ar ke t Lp rm 1. C B p ro hi bi te d fr om b uy in g go ve rn m en t s ec ur iti es in p rim ar y m ar ke t 1 2. C B n ot p ro hi bi te d fr om b uy in g go ve rn m en t s ec ur iti es in pr im ar y m ar ke t 0 N ot e: (1 ) T er m s of le nd in g co nc er n m at ur ity , i nt er es t a m ou nt o f l oa ns s ub je ct to th e re le va nt le ga l l im its . ( 2) T he r at io na le fo r th e cl as si fic at io n of t hi s va ri ab le i s th at m in im um r at es a re l ik el y to h av e be en d ev is ed i n or de r to d is co ur ag e bo rr ow in g at t he C en tr al ba nk w hi le m ax im um ra te s a re p ro ba bl y m ea nt to fa ci lit at e bo rr ow in g at th e C en tr al b an k. B ut th e re qu ire m en t o f a m in im um ra te is cl as si fie d be lo w “ m ar ke t r at es ” , s in ce m in im um r at es , w he n th ey e xi st , a re u su al ly lo w er th an m ar ke t r at es . So ur ce : C uk ie rm an (1 99 2) . Journal of Economics and Development Vol. 16, No.1, April 201458 References Alamsyah, H., and Joseph, C., and Agung, J., and Zulverdy, D. (2001), ‘Toward implementation of inflation targeting in Indonesia’, Bulletin of Indonesian Economic Studies, Vol. 37, No. 3, pp.309–24. Alesina, A. (1988), ‘Macroeconomics and Politics’, In NBER Macroeconomics Annual, edited by Stanley Fischer, Cambridge, Mass.: MIT Press, pp. 17-52. 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