Archive · 18 Jun 2025
Raghuram Rajan: Victimhood-Based Policies and Economic Backlash
Some politicians tell voters they are victims of others to get votes.
Raghuram Rajan says this is often wrong.
He gives examples like limiting jobs for locals or capping foreign students.
He says that would hurt businesses and universities.
Competent people from other places help countries to become better and increase the number of jobs.
He thinks it's better to help everyone get better skills and not just blame others for their issues.
He uses Singapore as an example of this strategy to be globally competitive.
Raghuram Rajan argues that policies based on victimhood narratives can backfire.
He cites examples of minimum employment quotas for locals in India and caps on foreign students in US universities.
Such policies could decrease productivity and competitiveness in the long run.
Rajan suggests it's better to improve the capabilities of those falling behind rather than blaming others.
He uses Singapore as an example, emphasizing global competitiveness.
- Who
- Raghuram Rajan, a professor and former RBI governor, analyzes the effects of victimhood-based policies.
- What
- Raghuram Rajan analyzes how policies based on 'victimhood' narratives can negatively impact economies.
- When
- The article discusses current economic and political trends.
- Where
- Examples are drawn from India, the US, and Singapore.
- Why
- Rajan argues that victimhood narratives lead to poor policies that can ultimately harm the economy, suggesting that improving capabilities is a better approach.
Advocates of Victim-Based Policies
Advocates of Free Market Policies
Employment Quotas
Advocates of Victim-Based Policies
Believes local job quotas are needed to protect local workers from migrants.
Advocates of Free Market Policies
Focuses on competitiveness; quotas reduce quality and productivity.
University Admissions
Advocates of Victim-Based Policies
Argue that foreign students displace deserving native-born students.
Advocates of Free Market Policies
Claims that caps would diminish the quality of US universities.
- Author
- Raghuram Rajan
- Occupation
- Professor of Finance, University of Chicago Booth School of Business
- Former Position
- RBI Governor
- Key Argument
- Victimhood narratives lead to harmful economic policies.
- Examples Cited
- Indian employment quotas, US university caps on foreign students.