The central bank that listens: Culture and communication in monetary politics

The study of monetary politics has traditionally accounted for the effects of economic and institutional structures upon central banking. This work does not focus on structures but rather on process, and in particular upon culture and communication in monetary politics. It shows why and how symbolic politics matters for the maintenance of central bank independence and therefore what role local knowledge plays in the functioning of such a global economic institution as independent central banking. This will set the stage for a direct engagement with the debate on globalization. Critics of globalization often allege that a neoliberal order is inimical to diversity and promotes worldwide a pensee unique about the economy that undermines democratic pluralism. This reading misunderstands the nature of a neoliberal order and neglects that the pursuit of marketization and economic globalization is per se not sufficient to qualify an economic order as neoliberal. In particular, at the roots of a neoliberal order lies a paradoxical notion of ‘efficiency as empathy’ that mandates economists and economic institutions to recognize diversity within the economic arena. It calls them to respect democratic pluralism. And it requires that economic institutions act as agents of communicative empowerment within their local contexts of operation. To show this, I concentrate upon the relationship between institutional efficiency and institutional adaptation to local contexts, and upon the cultural and communicative dimensions of the process of institutional adaptation. By emphasizing local adaptation, communication and culture, my analysis falls beyond the current mainstream political economy analyses of economic institutions that regularly disregard culture and communication and therefore fall short of adequately capturing the nature and relevance of the question of institutional adaptation.