Legal and Economic Analysis of Independence of the Central Bank of the Islamic Republic of Iran

دانشنامه حقوق اقتصادی

Volume 29, Issue 21, August 2022, Pages 50-84   

Document Type: Scientific research

DOI: 10.22067/economlaw.2022.74637.1133

Authors

Mostafa Elsan^{* 1}; Zarir Negintaji²

¹Associate Professor, Department of Private Law, Faculty of Law, Shahid Beheshti University, Tehran - Iran

²Assistant Professor, Faculty of Economics and Political Science, Shahid Beheshti University

Abstract

Contrary to popular belief, "central bank independence" is a legal issue that has economic implications. Because the determination of the powers, duties and responsibilities of the central bank is done by law and the government can not impose anything other than what is provided in the law to the central bank. Therefore, most studies on the independence of the central bank, from an economic point of view, deal with issues such as measuring the degree of independence, the effects of this independence on macroeconomic variables, etc. and examine the issue from a legal perspective and pathology of existing laws or the legal vacuum has not been addressed. Therefore, if the independence of the central bank is considered desirable, the best possible tool to achieve this is to provide for it in the law, which is examined in this study. This study is applied in terms of purpose and descriptive-analytical in terms of method and nature.
He results of this study show that despite a law that gives the government broad powers over how the central bank is run and interferes in its decisions, in the current situation, talking about the independence of the bank can only be a political slogan. Hence, however, the mere existence of a law that emphasizes the independence of the central bank is not sufficient for its independence; but it can be seen that the existence of such a law is a precondition for the practical independence of the central bank.
As a result, the independence of the central bank is related to various issues and has several criteria; Meanwhile, the interventionist role of the government (whether directly or by submitting a bill to parliament or enacting executive approvals) has the greatest impact on undermining the independence of the central bank.

Keywords

Central Bank; Independence; Comparative Study; Monetary Policy; iran

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