A nice speech by Raghuram Rajan at ISB’s grad day 2012. The speech is on Indian economy and its challenges ahead.
However, he begins nicely picking from Ronald Coase’s one of the central insight:
Unfortunately, the last hurdle in that education is to survive my speech. Worse still, I have a monopoly over your time conferred upon me by the school, where I can say what I want and you have no choice but to listen.
Chicago Nobel Laureate, Ronald Coase, would say that if we could create a spot market where you get together a collection to bribe me to cut my speech short, and I left with the money, the world would be a better place for both of us.
However, there are transactions costs in setting up that market, including the possibility that I might still inflict the speech on you even after you pay me, simply because I am attached to my duty as speaker, or because I love the sound of my own voice. We need an outside enforcer for the contract – perhaps Mr. Godrej might consent to step in?
He then touches on several governance issues in the country which keep bringing India down. Much of it is well known and oft repeated. So not discussing it..