This paper provides both theoretical and empirical evidence that maintains that a central bank’s organizational structure, culture and learning system are important for achieving best governance practices. It argues that a central bank’s organizational structure and culture facilitate the effective implementation of governance practices that have been enacted by law or in a strategic plan, with specific reference to central bank independence, communication, transparency, professionalization, technical excellence and reputation risk management.
After reviewing the relevant central bank governance literature, a matrix of best practices in organizational culture, structure and learning system, based on the relevant organizational behaviour theory, is presented. This paper contends that a central bank exhibiting best governance practices would, among several other features, have a less hierarchical organizational structure and a more open learning culture. A theoretical framework is applied to the case of the central bank of Morocco — the Bank Al-Maghrib. Qualitative interviews and a review of the bank’s primary documents showed that the progress made by the Bank Al-Maghrib over the last two decades in establishing best governance practices in policies and legal statutes is, to a significant extent, being matched by reforms to its internal processes, but there remains room for improvement.
Drawing from the organizational behaviour and political science literature opens a new avenue of potential research and empirical testing into how to facilitate many aspects of best practice in central bank governance. This is the first working paper of a broader project seeking to conceptualize best practices in central bank governance from an organizational behaviour perspective.