Suppressing criticism can lead to mistakes in policymaking, says Raghuram Rajan

A lack of tolerance towards public, as well as internal, criticism can lead to mistakes in policymaking, and governments do themselves a gross disservice by doing so, said former Reserve Bank of India (RBI) Governor Raghuram Rajan.
“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,” Rajan said.
He also said that dwelling on historical achievements and opposing foreign ideas or foreigners reflects great insecurity and may hamper economic development.
Recently, the reconstitution of the prime minister’s Economic Advisory Council (PMEAC) has drawn criticism from various quarters for dropping two members who voiced their concerns on the government’s policies.
Shamika Ravi, the director of research at Brookings India, and Rathin Roy, the director of the National Institute of Public Finance and Policy, expressed concerns on the government’s intention to borrow from overseas markets via sale of sovereign bonds. In August, Ravi took to Twitter to call out for major reforms to tackle a structural slowdown in the economy.
Rajan, too, earlier warned about the consequences of issuing dollar-denominated sovereign bonds and suggested easing of restrictions on foreign investments in government bonds instead.
In an essay released on his blog, Rajan says that 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,” he added.
“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 said, adding that such achievements should not divert people from efforts to improve current systems.
In the “not invented here” syndrome lies stagnation, the former central banker said. “We cannot be so insecure that we believe allowing foreign competition will demolish our culture, our ideas, and our firms,” he added.
Rajan also said that it was essential to foster competition for ideas and that they should be scrutinized critically as it ruled out imposition of views or ideologies from a position of power.