Head of Indian Central Bank says crony capitalism is hurting the developing country (We have a similar problem)

Rajan cc

Outside of the United States the country which has arguably most focused on the issue of crony capitalism is India, the world’s largest democracy, rising economic power, and home to a deep crony culture. The head of the Reserve Bank of India, Raghuram Rajan, argued yesterday that India isn’t living up to its economic potential due the system of crony capitalism which has emerged in the country over the last 2 decades.

We suffer from a similar malady.

(From Daily Bhaskar)

By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity, and economic growth. And by substituting special interests for the public interest, it is harmful to democratic expression. If there is some truth to these perceptions of crony capitalism, a natural question is why people tolerate it. Why do they vote for the venal politician who perpetuates it?”

That is a very good question for both Indians and Americans.