Lecturer/Assistant Professor

School of Political Science and International Studies​

University of Queensland

Michael A. Gavin

My data shows that between the seventeenth century and 1914, central banks underwent a fundamental transformation. Early central banks were overwhelmingly designed to finance governments, but from the late eighteenth century onward newly established banks increasingly focused on supporting private credit markets through the discounting of commercial bills. Following the Napoleonic Wars, this shift accelerated, and by 1914 more than 90% of central banks discounted private bills while only 59% retained government lending powers.

Funding the Fund: The politics of actually paying for global pubic goods (in progress)

"Influence by omission: The IMF's lending capacity and central bank design," The Review of International Organizations (forthcoming) (with Carolina Garriga). A link to the data is coming soon!

Using a dataset built from more than 9,000 analyst reports, we find that populist governments are significantly more likely to publicly pressure central banks and, unlike other governments, often succeed in obtaining lower interest rates (top left panel).

These monetary concessions come at a cost since pressure from populist governments is associated with higher inflation in subsequent quarters (bottom left panel), suggesting that political influence can weaken the practical autonomy of nominally independent central banks.

Carolina Garriga and I constructed an original index of central bank lender-of-last-resort (LLR) powers based on six dimensions: collateral requirements, maturity restrictions, interest-rate restrictions, the ability to lend under extraordinary circumstances, the presence of a financial stability committee, and whether government approval is required for emergency lending. We reveal a clear upward trend over time, with developing countries steadily expanding the lender-of-last-resort powers of their central banks since the 1990s.

"Interest groups and central bank credit policies: Evidence from 1600-1914", Comparative Political Studies, 59(2), pp. 410-438. Data.

"Populism and de facto central bank independence", Comparative Political Studies, 56(8), 2023, pp. 1189–1223. (with Mark Manger) Data.

A major component of my research has been the construction of an original dataset on the functions and powers assigned to historical central banks. Drawing on central bank laws and charters, I coded 69 central banks established between 1600 and 1914 and tracked how their responsibilities evolved over time. The dataset provides the most comprehensive record of historical central bank design.

In this figure I show that sovereign borrowing costs rose after a central bank was tasked with lending to the state (middle panel) and fell after a central bank was tasked with assisting the private sector (right panel).

"Central banks and sovereign debt credibility before 1914," British Journal of Political Science (forthcoming) A link to the data is coming soon!

I constructed another dataset by coding more than 3,000 country speeches delivered at IMF Annual Meetings. The dataset measures governments' publicly expressed views on the adequacy of the IMF's resources and reveals a persistent divide between the Fund's principal creditors and potential borrowers. Lower scores indicate greater disappointmet in the IMF's lending capacity. While potential borrower countries have consistently advocated for a larger IMF, major creditor countries have generally been more cautious.