Question

One of the major criticisms of Administrative Agencies is that “the need for specialized expertise in a given area can usually only come from the industry being regulated.” We can see this by the number of former Wall Street executives working for and heading the SEC or the United States Treasury or former pharmaceutical executives working for a heading the FDA. What do you think about this practice? Provide examples to defend your viewpoint.

Answer 1

I agree and support the viewpoint that a person leading an administrative agency or other international agencies should have the past experience, credentials and understanding of the function that is controlled and managed by the particular agency. It helps in proactive contributions in policy planning, curing chronic issues and make the system more efficient that can prevent the crisis, scandal and other issues of demoralizing nature. According to this viewpoint, the international monetary funds (IMF) is headed by Christine Lagarde. She has been eminent lawyer, politician and expert of economics and finance. Even in the recent past, she has hold positions in finance ministry in the French government. It makes her an expert of economic development, reforms and assistance that can be offered by the institutions like IMF in different parts of the world. Hence, She leads the IMF. On a similar note, the current chairman of the Federal Reserve in the USA is led by Jerome Powell, who himself is the expert of law, economics and finance and worked for different institutions in different capacities. It has made the Fed to form policies that can help resolve the macroeconomic challenges faced by the US economy. So, the expertise of the leader person helps the agencies to become proactive.
Though, there is a scope of conflict of interest also where the agency head or controlling member of the agency can indirectly extend the help to the organizations that are previously held or owned by them. So, it is to be carefully analyzed and it should be clear for these heads to respect the constitutional values and deter from any activities that can fall under the category of insider trading.