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The main purpose of this study is to investigate the effects of oil rents and corruption on central bank independence in oil exporting countries. The panel data method is used for 25 oil dependent countries over the period of 2000-2012. The results show that oil rents and corruption reduce the central bank independence in oil exporting countries. In addition, in order to make a comparison between the role of oil rents and other rents in affecting the central bank independence, the present study examines the effects of other rents arising from other sources such as gas rent, the forest rents and the total rents of natural resources on the central bank independence. The results show that gas and forestry rents do not have a significant effect on central bank independence in oil exporting countries, but the effect of total natural resource rents, including oil rents, on central bank independence is negative and statistically significant. Moreover, according to the other control variables employed in our empirical models, we find that GDP per capita, government expenditures and liquidity have negative and statistically significant impact on central bank independence in oil exporting countries. While, the improvement in the transparency index and public information may reduce the central bank independence in these countries. The results of this study indicate that the oil exporting countries can protect their central bank independence by managing their oil rents and controlling the liquidity and government spending behavior. This may happen through improving the transparency index and public awareness.
 

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Enhancing the independence of the monetary authorities to mitigate inflationary bias is seen as a crucial political decision. Many countries, by adopting this approach, have assured their economies that controlling inflation and achieving macroeconomic stability are binding constraints for political authorities. Some countries enshrine such independence in their constitution, others through legislation related to the central bank, while some adhere to it in practice without any legal mandate. With the introduction of the new Central Bank Act, questions arise about whether this principle has been upheld. This study employs prominent independence measurement indicators, namely the Cukierman Index and the Grilli Index, to assess the Central Bank's independence under both the Monetary and Banking Act and the new Central Bank Act, as well as to compare it with other countries’ central banks’ independence. The results indicate that, compared to the Monetary and Banking Act, the new Central Bank Act has increased the Central Bank's independence by 16.6% based on the Grilli Index and by approximately 7% based on the Cukierman Index. However, despite these improvements, the legal independence of the Central Bank under the new act remains within the lowest 25% globally.