Episode 2074: Raghuram Rajan on why India must break the mold if it is become a prosperous 21st century economy

Few people are better equipped to unravel the riddle of the Indian economy than the former Governor of the Reserve Bank of India, Raghuram Rajan. As the co-author (with Rohit Lamba) of the just published Breaking the Mold: India’s Untraveled Path to Prosperity, Rajan lays out a strategy for Indian economic development that might allow the country to both maintain its much storied democracy and provide jobs and prosperity for its almost 1.5 billion people. While Rajan didn’t use the term “third way” in our conversation, there is a sense that he’s trying to navigate India between the Scylla of conventional western free market neo-liberalism and the Charybdis of the protectionism pursued by populists like Trump, Erdogen and perhaps the current Indian Prime Minister Narendra Modi. Certainly no great fan of Modi’s bureaucratic centralization, Rajan’s path to prosperity lies in decentralizing economic power to its federal states. It’s in the enlightened economic policies of states like Kerala, Rajan argues, that India can break the mold and become not just a prosperous society but also a model for other developing 21st century economies. Raghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago business school. He was the 23rd Governor of the Reserve Bank of India between September 2013 and September 2016. Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund. Dr. Rajan’s research interests are in banking, corporate finance, and economic development. The books he has written include Breaking the Mold: Reimagining India's Economic Future with Rohit Lamba, The Third Pillar: How the State and Markets hold the Community Behind 2019 which was a finalist for the Financial Times Business Book of the Year prize and Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times prize for Business Book of the Year in 2010. Dr. Rajan is a member of the Group of Thirty. He was the President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences. In January 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40. The other awards he has received include the Infosys prize for the Economic Sciences in 2012, the Deutsche Bank Prize for Financial Economics in 2013, Euromoney Central Banker Governor of the Year 2014, and Banker Magazine (FT Group) Central Bank Governor of the Year 2016. Dr. Rajan is the Chairman of the Per Jacobsson Foundation, the senior economic advisor to BDT Capital, and a managing director at Andersen Tax.Named as one of the "100 most connected men" by GQ magazine, Andrew Keen is amongst the world's best known broadcasters and commentators. In addition to presenting KEEN ON, he is the host of the long-running How To Fix Democracy show. He is also the author of four prescient books about digital technology: CULT OF THE AMATEUR, DIGITAL VERTIGO, THE INTERNET IS NOT THE ANSWER and HOW TO FIX THE FUTURE. Andrew lives in San Francisco, is married to Cassandra Knight, Google's VP of Litigation & Discovery, and has two grown children.Keen On is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit keenon.substack.com/subscribe