AND MIHAIL MIHAYLOV Comparing the Institutional and Organizational Design of Currency Boards in Transition Countries

has been carried out within the framework of the Phare ACE P97-8154-R project, financed by the European Union. The authors thank Kalina Dimitrova of the Bulgarian National Bank for research assistance. The authors are grateful for helpful comments from J. Miller, U. Hege, and R. Pikkani. ABSTRACT: The article carries out a comparative and descrip-tive analysis of the currency boards that have been introduced in three East European countries: Bulgaria, Estonia, and Lithuania. The initial conditions and specific features of currency boards in these three countries are presented in detail. There is also a focus on the institutional, organizational, legal, and political character-istics of these currency boards. Special attention is given to devia-tions from the orthodox currency board framework. Currency boards in the countries under consideration limit the scope for monetary policy, due to the presence of atypical balance sheet items and the employment of a number of monetary policy instru-ments. The comparison of currency board operation in the three countries reveals significant differences in the historical back-ground of currency board adoption, institutional design, and overall macroeconomic framework. This observation does not fit com-pletely with the generally accepted view that currency boards in the three transition economies function in a similar pattern and that the differences among them are insignificant. The article sug-gests some new directions for the analysis of currency boards in transition countries