The strengthening of central banks is frequently considered as a direct consequence of globalization. This paper offers an alternative explanation which considers this process as the result of political processes taking place first and foremost within local political fields. Yet we consider globalization as an important component in the politics of institutional reforms, by serving as a resource mobilized by political actors striving to improve their position in the local political field. We show how the central bank in Israel appealed to the normative power of worldwide accepted institutional models, to the authority of international financial organizations, and to the disciplinary power of global financial markets, claiming that the adoption of central bank independence is imposed by the imperatives of globalization. We claim that the ability of central banks to conduct a credible politics of inevitability is based on their privileged location as nexus between the global and local fields.
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- Central bank independence
- Israeli political economy
- discursive neoinstitutionalism
- institutional change