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Suppressing criticism can lead to policy mistakes, warns Raghuram Rajan

Mini

People in authority have to tolerate criticism for a failure to do so will lead to policymaking mistakes, Raghuram Rajan, the former governor of the Reserve Bank of India (RBI), has said.

Suppressing criticism can lead to policy mistakes, warns Raghuram Rajan
People in authority have to tolerate criticism for a failure to do so will lead to policymaking mistakes, Raghuram Rajan, the former governor of the Reserve Bank of India (RBI), has said.
Rajan, who served as the RBI governor from September 2013 until the end of his tenure three years later, has taken to LinkedIn to post a five-page document on the current state of affairs in the country through the story of eminent jurist and economist Nani Palkhivala.
On the current state of affairs in the country, Rajan wrote that the tendency to look back into past for evidence of greatness is a sign of insecurity and is counterproductive to development.
“I worry about three emerging developments, however. The first is a tendency to look back into our past to find evidence of our greatness. Understanding our history is, obviously, a good thing, but using history to thump our own chest reflects great insecurity and can even be counterproductive. It does nothing for enhancing our current capabilities.”
Rajan added that despite an insular approach and nascent research systems, organisations like Tata Institute of Fundamental Research (TIFR) and Indian Space Research Organisation (ISRO) have done exceedingly well to overcome all handicaps on way to historic achievements.
“It was our poverty in the past and continuing shortcomings in our still-developing academic, corporate, and government research systems that keep us from the frontier. Even so, a number of our institutions like ISRO and TIFR have overcome even these handicaps.
“While we should be proud of the very real achievements of an Aryabhatt, pride in the past should not divert us from the enormous effort that is needed today to improve our current systems. Indeed, an excess focus on the past makes us its prisoners. Let us find the strength to move on.”
Rajan touched upon the works of Nobel laureate Robert Sokolow, legendary physicist Richard Feynman, industrial revolution in Britain, rulers of ancient India and post-war protests in the United States to illustrate his points in his post.
He urged authorities to be tolerant to opposing points of views, positing that an aversion to criticism is a surefire way to make policy mistakes.
“Finally, people in authority have to tolerate criticism. Undoubtedly, some of the criticism, including in the press, is ill-informed, motivated, and descends into ad-hominem personal attacks. I have certainly had my share of those in past jobs. However, suppressing criticism is a sure fire recipe for policy mistakes.”
In what can be construed as a veiled attack on the ruling dispensation in the country, the economist said that troll attacks on criticism may silence critical vices but the government will not be wiser for it.
“If every critic gets a phone call from a government functionary asking them to back off, or gets targeted by the ruling party’s troll army, many will tone down their criticism. The government will then live in a pleasant make-believe environment, until the harsh truth can no longer be denied.
“Constant criticism allows periodic course corrections to policy — indeed public criticism gives government bureaucrats the room to speak truth to their political masters. After all, they are not screaming the loudest in the room.
“Conversely, fulsome public praise crowds out the possibility that the government can be self-critical — even a whisper of dissent stands out. Governments that suppress public criticism do themselves a gross disservice.”
Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth. Apart from the RBI governorship, he held the post of chief economist and director of research at the International Monetary Fund between 2003 and 2006.

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