Commitment Compliance in G-7 Summit Macroeconomic Policy Coordination
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Conventional wisdom suggests that the G-7 summit makes few substantive decisions and lacks effective monitoring and sanctioning mechanisms to enforce individual countries' commitments. However, evidence exists that G-7 countries do honor their commitments announced in summit declarations. In this article, I offer and test for the period from 1975 to 1989 several causal explanations for compliance with non-binding commitments dealing with inflation control: institutional constraints on monetary and fiscal policymaking, electoral politics, uncertainty, and reciprocity. Reciprocating behaviors, independent central banks, and high current inflation rates correlate positively with compliance over inflation-control commitments. In addition, there is some evidence that divided/coalition governments and uncertainty reduce compliance. Theoretical and policy implications of the findings are discussed.
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