The past few years have witnessed a trend of increased delegation of authority to central banks. Increasing central bank independence is a recommended strategy for governments to establish a credible commitment to price stability as the final objective of the monetary authority, even at the cost of other objectives that may be more appealing to the political authorities. Existing literature on measuring central bank independence focuses on developed countries where quantifying the independence of central banks is easier, since quantifying the legal charter is sufficient to reflect the degree of central bank independence. However, in developing countries this task is laborious as quantifying the legal charter is often insufficient, since laws are often incomplete, ambiguous, or simply not respected.

This paper attempts to quantify the degree of independence in the Central Bank of Egypt (CBE), from both a legal and behavioral context, since its establishment in 1960 until 2004. The study used four indices in line with the work of Jacome (2001), Cukierman, et al. (1992), and Cukierman and Webb (1995), where each index is designed in such a way to capture a somewhat different aspect of independence. This study captures the discrepancies between the degree of independence conferred to the Central Bank of Egypt by law and actual practice. Results from this exercise offers insights that direct monetary policy conduct and the Central Bank legislations towards areas where efforts should be made to enhance the Central Bank of Egypt independence which is the key to achieving price stability and the stability of the financial system in general. .


Economics Department

Degree Name

MA in Economics

Date of Award


Online Submission Date


First Advisor

Ahmed Kamaly

Committee Member 1

Ahmed Kamaly

Committee Member 2

Adel Beshai

Committee Member 3

Herbert Thompson

Document Type



80 leaves :

Library of Congress Subject Heading 1

Banks and banking, Central


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Call Number

Thesis 2005/84



Included in

Economics Commons