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

Badinger, Harald and Nitsch, Volker (2014) National Representation in Supranational Institutions: The Case of the European Central Bank. Journal of Comparative Economics, 42 (1). pp. 19-33. ISSN 0147-5967


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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.

Item Type: Article
Additional Information: To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription. The original publication is available at
Keywords: organization / central bank / nationality / monetary policy
Classification Codes: JEL E02, E58, H83
Divisions: Departments > Volkswirtschaft > Internationale Wirtschaft
Version of the Document: Accepted for Publication
Depositing User: ePub Administrator
Date Deposited: 27 Nov 2013 14:07
Last Modified: 19 Jul 2020 11:57
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