Professor Hanke has advised governments across four continents over five decades. His advisory work has been conducted on a pro-bono basis for all foreign governments. In every country where his currency board or dollarization prescriptions were fully implemented, the results were transformative. In every country where his advice was rejected or only partially followed, the crises continued — or worsened.
💰 Pro Bono Service: "I have never charged a foreign government for my advisory work. If you are going to advise the president of a country, you cannot have divided loyalties. The only people you work for are the citizens of that country." — Steve H. Hanke
"I have solved more hyperinflation problems than any living economist — and it's all been through either currency boards or a cousin." — Professor Steve H. Hanke
The Money Doctor: Origins
Hanke began advising governments on monetary reform in the late 1970s, starting with his work on Maryland's Governor's Council. His reputation grew through academic publications and practical results. By the early 1990s, as the Soviet empire collapsed and new nations scrambled to establish credible monetary systems, Hanke's expertise in currency boards — a monetary arrangement with a 150-year track record that most central bank economists had forgotten — made him uniquely valuable.
His approach was shaped by three principles:
- Rules over discretion — currency boards impose automatic monetary discipline that politicians cannot override
- Credibility over flexibility — a fixed exchange rate anchor destroys inflation expectations instantly
- Speed over gradualism — in a hyperinflation, delay is fatal; the cure must be immediate
These principles, combined with his extensive fieldwork and his willingness to work pro-bono, made Hanke the world's leading practitioner of monetary reform in the 1990s and 2000s.
Countries Advised: Full Record
Country | Year(s) | Role | Achievement | Currency Outcome |
Argentina | 1990–91 | Government Adviser | Designed blueprint for currency board / convertibility system | Convertibility Law of 1991 ended hyperinflation |
Estonia | 1992 | Currency Board Architect | Blueprint for Estonian currency board (with Schuler and Lars Jonung) | Replaced Soviet ruble with kroon; ended hyperinflation |
Lithuania | 1994–96 | State Counselor | Implemented currency board system | Ended high inflation; stable litas established |
Bosnia & Herzegovina | 1996–97 | Special Adviser to U.S. Government | Designed currency board under Dayton Accords framework | IMF-supervised convertible mark currency board established |
Bulgaria | 1997–2002 | Chief Adviser to President Petar Stoyanov | Installed currency board July 1, 1997; ended 242%/month hyperinflation | Foreign reserves tripled; interest rates fell to 2.4% by 1998 |
Indonesia | 1998 | Adviser to President Suharto | Proposed currency board during Asian financial crisis | Currency board not implemented; crisis continued and deepened |
Venezuela | 1995–96 | Presidential Adviser | Currency board proposals to stabilize bolivar | Reform not implemented; inflation worsened |
Montenegro | 1999–2003 | State Counselor | Replaced hyperinflating Yugoslav dinar with Deutsche Mark | Successful dollarization; later transitioned to euro |
Ecuador | 2000 (advisory) | Currency / dollarization adviser | Official dollarization adopted | Stable economy; inflation eliminated |
Yugoslavia | 1990 | Government Adviser | Anticipated hyperinflation; designed currency board blueprint | Descent into war prevented implementation |
Russia | 1990s | Academic Adviser | Blueprint for currency board reform (Russian Currency and Finance, 1993) | Currency board not implemented; ruble collapsed 1998 as Hanke predicted |
Albania | Senior appointment | Government Adviser | Currency and financial sector reform | Currency stabilization |
Kazakhstan | Senior appointment | Government Adviser | Currency reform advising | Monetary stabilization |
UAE | Senior appointment | Government Adviser | Economic reform advising | — |
Case Spotlight: Bulgaria (1997)
The Bulgarian case is the clearest demonstration of Hanke's approach. By early 1997, Bulgaria was in freefall:
- Monthly inflation had reached 242% per month
- The banking system was insolvent
- The economy was in deep depression
- The government faced a fiscal crisis
Hanke was appointed Chief Adviser to President Petar Stoyanov and moved quickly. On July 1, 1997, Bulgaria's currency board went live, pegging the lev to the Deutsche Mark at a fixed rate, backed 100% by foreign reserves.
Within one year of the July 1, 1997 currency board installation: money-market interest rates fell from triple digits to 2.4%, the banking system became solvent, a massive fiscal deficit turned into a surplus, a deep depression became economic growth, and Bulgaria's foreign-exchange reserves more than tripled. Today, Bulgaria has the second-lowest debt-to-GDP ratio in the EU, behind only Estonia.
Bulgaria today has the second-lowest debt-to-GDP ratio in the European Union. Hanke is known there as the "Father of the Bulgarian Currency Board." He received an honorary doctorate from the Bulgarian Academy of Sciences in 2013 and from Varna Free University in 2015.
Case Spotlight: Estonia (1992)
When Estonia regained independence from the Soviet Union, it faced the challenge of replacing the collapsing Soviet ruble with a credible new currency. Hanke, working with Kurt Schuler and Swedish economist Lars Jonung, designed the blueprint for the Estonian currency board.
The kroon was introduced in June 1992, pegged to the Deutsche Mark via a currency board. The system was an immediate success — Estonia's transition to a market economy was one of the smoothest of any post-Soviet state, and the country became a model for others. Lars Jonung's advocacy helped convince Swedish Prime Minister Carl Bildt to support the approach.
Case Spotlight: Montenegro (1999)
As Yugoslavia descended into the chaos of the Milosevic era, Montenegro's government sought to protect its citizens from the hyperinflating Yugoslav dinar. Hanke, serving as State Counselor from 1999 to 2003, advised the government to adopt the Deutsche Mark as its official currency — a form of dollarization.
The transition was a success. Montenegro's economy was insulated from Yugoslav monetary chaos, and the Deutsche Mark (later the euro) provided the stability needed for economic recovery. Montenegro subsequently adopted the euro when it became available.
Case Spotlight: Pakistan (2023)
In April 2023, Hanke was contacted by Imran Khan, the former Prime Minister of Pakistan, via Zoom. Hanke prescribed a currency board for Pakistan's chronically troubled rupee. The advice was not implemented. Pakistan's economic crisis has since deepened, with the rupee losing 48% of its value since June 2021.
Where Hanke's Advice Was Rejected
Not every government followed Hanke's recommendations. In two high-profile cases, the results of rejection were devastating:
Indonesia (1998): During the Asian financial crisis, Hanke proposed a currency board for the Indonesian rupiah. President Suharto was receptive. The IMF and U.S. Treasury — led by then-Deputy Treasury Secretary Lawrence Summers — pressured Suharto to reject the plan. The rupiah continued its collapse, contributing to Suharto's fall and years of economic hardship.
Russia (1990s): Hanke published a detailed blueprint for a Russian currency board in Russian Currency and Finance (1993). Russian authorities and Western advisers pursuing other approaches ignored it. The ruble collapsed in 1998, wiping out savings across Russia, exactly as Hanke had warned.
Recent Publications (2025–2026)
- Money Doctor & Captain Pakistan — Op-ed, Fortune Magazine
- Milei Isn't Out of the Woods Yet — Op-ed, National Review
- Argentina Passes the Begging Bowl — Op-ed, Fortune Magazine
- Ecuador's Dollarization: Template for Argentina — Working Paper, Johns Hopkins IAE
- La Dolarización en Ecuador — Book, Grupo Union
Related Pages
- Currency Boards — The technical instrument behind most of Hanke's advisory solutions
- Hyperinflation — The monetary crisis that Hanke's work prevents
- Dollarization — The alternative anchor used in Montenegro and Ecuador
- International Advisory Impact — The human cost of hyperinflation and how currency reform saves lives