The one-handed economist, anyone?–Economic Times–11.08.2017

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.

This piece appeared as an editorial opinion in the print edition of The Economic Times.
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