Development Central Banking: A Review of Issues and Experiences

The paper argues that central banks should play a broader role in helping developing countries meet their key challenges, such as generating productive employment, helping to allocate investment to productivity enhancing activities and helping to tackle the challenges of climate change. A great deal of work needs to be done to better understand the optimal institutional and governance structures for central banks in different settings, the types of goals and instruments most appropriate for different challenges, and the best kinds of monitoring frameworks to empower central banks to carry out its core stabilization function while implementing its development goals. Finally, it needs to be better understood how the central bank can work effectively with other key institutions, such as development banks, specialized financial institutions and a variety of government ministries and private actors while, at the same time, ensuring that it is not overwhelmed with tasks better undertaken elsewhere. To answer these questions, more case studies are required. General lessons are certainly helpful, but appropriate solutions are to be found in specific national settings.