Outsiders at the Bank of England's MPC


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    In this case adding more outsiders is in theory beneficial because of Condorcet's jury theorem, which states that increasing the committee size improves group decisions that are based on imperfect information. Blinder and Morgan (2008) demonstrate in an experiment that doubling the committee size from four to eight indeed leads to better monetary policy outcomes.

  • The views expressed in this paper are the author's and do not necessarily reflect those of the Swiss National Bank. I thank the Editor, two anonymous referees, Katrin Assenmacher-Wesche, Severin Bernhard, Urs Birchler, Alan Blinder, Alex Cukierman, Petra Geraats, Stefan Gerlach, Charles Goodhart, Charlotta Groth, Heinz Herrmann, Lavan Mahadeva, Ellen Meade, Samuel Reynard, Barbara Rudolf, Christopher Spencer, Mathias Zurlinden, and seminar participants at the SNB, the Norges Bank Research Workshop on Monetary Policy Committees, and the 2008 Bundesbank-OeNB-SNB workshop for helpful comments.


The monetary policy committee (MPC) of the Bank of England consists of five internal and four external members. We study the voting record and show that outsiders dissent more often than insiders and tend to prefer lower rates, especially during economic downturns. Moreover, dissents by outsiders help forecast future interest rate changes, in contrast to dissents by insiders. A model in which outsiders in contrast to insiders are “recession averse” and more uncertain regarding the appropriate level of interest rates replicates the observed voting pattern well.