Central Bank Accountability through the Eyes of Politicians: Evidence from a Survey of MEPs during the Covid-19 Crisis

In the wake of the Covid-19 crisis, questions about central banks’ accountability to democratic institutions and the proportionality of their expansionary measures have gained renewed attention in the public debate in Europe and elsewhere. Yet, little do we know from previous scholarship on central bank accountability about the views of elected officials on the activism of central banks in times of crisis. Do politicians see the crisis-fighting measures of central banks as legitimate and proportionate, and what drives their opinions about central bank accountability and independence? To answer these questions, we employ novel data from an elite survey of the Members of the European Parliament (MEPs) during the Covid-19 crisis. First, we uncover differences in MEPs’ opinions about the degree of accountability and independence of the ECB in the pandemic. Corroborating the findings from previous research, we show that these differences are largely driven by the ideological stance of MEPs. Second, we make use of two embedded survey experiments to assess the causal determinants of MEPs’ views on central bank accountability. On the one hand, we show that MEPs are sensitive to information on local macroeconomic conditions in their evaluation of the importance of the ECB’s primary mandate vis-à-vis its secondary objectives. On the other hand, we provide evidence that politicians’ opinions about the desirability of the political independence of the ECB are not directly driven by information on the activism of the institution. Taken together, these findings shed new light on the determinants of the accountability relationship between politicians and central bankers in Europe.