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	Central Bank Independence Index	Political Budget Cycle Analysis
Field	Political Economy	Political Economy
Family	Process / pipeline	Regression model
Year of origin	1992	1990
Originator	Alex Cukierman, Steven B. Webb & Bilin Neyapti	Kenneth Rogoff (building on William Nordhaus)
Type	Composite institutional index	Panel econometric model of opportunistic fiscal policy
Seminal source	Cukierman, A., Webb, S. B., & Neyapti, B. (1992). Measuring the Independence of Central Banks and Its Effect on Policy Outcomes. World Bank Economic Review, 6(3), 353-398.	Rogoff, K. (1990). Equilibrium Political Budget Cycles. American Economic Review, 80(1), 21-36.
Aliases	CWN Index, Cukierman CBI Index, Legal Central Bank Independence Index, CBI Index	Electoral Budget Cycle Analysis, Opportunistic Fiscal Cycle Model, Pre-Election Fiscal Manipulation Analysis, Election-Year Deficit Model
Related	2	3
Summary	The central bank independence index of Cukierman, Webb, and Neyapti (1992) is the foundational quantitative measure of how insulated a monetary authority is from political control. It reads the central bank's statute and codes dozens of legal provisions into four groups — the appointment, tenure, and dismissal of the chief executive; who holds authority over monetary policy formulation and conflict resolution; the bank's statutory objectives, especially the primacy of price stability; and the limits on the bank's lending to government — then scores each provision on a zero-to-one scale and aggregates them with explicit weights into a legal independence index running from zero to one. To capture the gap between law and practice, the authors complement this de jure index with a de facto measure: the turnover rate of central bank governors. The framework launched the empirical literature linking institutional design to inflation performance.	Political budget cycle analysis is an econometric framework for detecting whether incumbent governments manipulate fiscal policy — deficits, public spending, or taxes — in the run-up to elections to signal competence and win votes. Kenneth Rogoff's 1990 equilibrium model gave the idea rational micro-foundations: even forward-looking voters can be temporarily fooled when competence is imperfectly observed, so able incumbents distort the fiscal mix before an election to separate themselves from less able rivals. Empirically the cycle is identified by an election-timing indicator in a fixed-effects panel regression of fiscal outcomes, and Brender and Drazen's 2005 study showed the effect is concentrated in new, inexperienced democracies rather than established ones.