The One-Handed Econ­o­mist, Any­one?

Com­pe­tence mat­ters, not the place of train­ing

The Economic Times - - The Edit Page -

The colour of the cat does not mat­ter, so long as it catches mice, said Deng Xiaop­ing. This is a good prin­ci­ple to use when puz­zling over which kind of econ­o­mist to choose: home­grown ones or those sport­ing for­eign de­grees and pre­sum­ably hostage to for­eign ideas and ide­olo­gies. A de­bate on the suit­abil­ity of econ­o­mists trained abroad for for­mu­lat­ing pol­icy in the coun­try is cur­rently un­der­way. We urge that this de­bate is a waste of time and good­will amongst key per­son­nel in the gov­ern­ment. Harry Tru­man’s call for a one-handed econ­o­mist, af­ter tir­ing of ad­vice con­tin­gent on the one hand and on the other, might be more per­ti­nent.

KN Raj was a home­grown econ­o­mist, and he was as good as any. Cut to more re­cent times. C Ran­gara­jan took his PhD from the Univer­sity of Penn­syl­va­nia but his re­ports on things as wholly In­dian as the pric­ing of sug­ar­cane con­tinue to res­onate with politi­cians at the Centre and in the states. The late Sau­mi­tra Chaud­huri, who served on the PM’s eco­nomic ad­vi­sory coun­cil and the Plan­ning Com­mis­sion, was one of the most ver­sa­tile econ­o­mists ever em­ployed by a gov­ern­ment, work­ing on prob­lems rang­ing from blend­ing ethanol into petro-fu­els to keep­ing tabs on macroe­co­nomic sta­bil­ity in the real world of con­strained trade and volatile cap­i­tal flows. He was fully in­dige­nous. Mon­tek Singh Ah­luwalia and Shankar Acharya stud­ied abroad but played a ster­ling role in shap­ing In­dia’s eco­nomic pol­icy as In­dia be­gan to open up. And would any­one grudge Dr Man­mo­han Singh ei­ther his role in eco­nomic re­form or his for­eign de­gree?

Rakesh Mo­han makes a per­ti­nent point, how­ever: it is not enough to know eco­nomic the­ory; you must also know the gov­ern­ment sys­tem, to be ef­fec­tive. But there are oc­ca­sions when too much fa­mil­iar­ity is a drag, as when the task is to bring in a regime change in bank reg­u­la­tion and mon­e­tary pol­icy, the chal­lenge Raghu­ram Ra­jan un­der­took. The point is to be good at the job, not the ge­neal­ogy of skill ac­qui­si­tion. Af­ter all, as­sim­i­la­tion has been a key part of the In­dian ethos and genius.

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