Forged in crisis: central bankers’ formative experiences, policy orientation, and inflation in Africa

This study examines the relationship between central bankers’ policy orientation and inflation across thirty African countries from 1980 to 2022. In practice, measuring the preferences of central bankers is difficult in environments where formal institutional arrangements coexist with strong fiscal pressures on monetary authorities. To address this, we introduce the Central Bank Policy Orientation Index (CBPOI), an experience-based measure constructed from central bankers’ early-life exposure to major macroeconomic crises—including inflation, currency, debt, and banking crises—during the first 25 years of their lives, which may shape subsequent policy preferences. Combining a simple theoretical framework with empirical analysis, we document a negative association between CBPOI and inflation. This association is stronger in countries with higher levels of legal central bank independence, consistent with the view that individual policy orientation matters most when institutional arrangements allow latent policy preferences to be translated into realized policy choices.