Kaushik Basu


Kaushik Basu is an Indian economist who was Chief Economist of the World Bank from 2012 to 2016. He is the C. Marks Professor of International Studies and Professor of Economics at Cornell University, and began a three-year term as President of the International Economic Association in June 2017. From 2009 to 2012, during the United Progressive Alliance's second term, Basu served as the Chief Economic Adviser to the Government of India.

Early life and education

Kaushik Basu was born in Kolkata, India and schooled at St. Xavier's Collegiate School, Kolkata. In an autobiographical essay he noted that finishing school in 1969 he was caught in a dilemma. His father wanted him to study physics. But those were revolutionary times and he wanted to study nothing. They settled on economics as half-way compromise between physics and nothing. In 1969 he moved to Delhi to do his undergraduate studies in Economics, from St. Stephen's College, Delhi. He then went on to the London School of Economics, to do his MSc in Economics completing it in 1974. After earning his master's degree, Basu was supposed to move to England to study law and take over his father's legal practice, but he had fallen in love with the concept of logic and deductive reasoning and became fascinated by Amartya Sen's work. He remained at the London School of Economics for his PhD, from 1974 to 1976. He completed his PhD on choice theory under the tutelage of Amartya Sen.
He has received honorary doctorates from Lucknow University, Lucknow, in 2011, Assam University, Silchar, in 2012, Fordham University, New York, in 2013, Indian Institute of Technology Bombay, in 2013, University of Bath, U.K., in 2016, on the occasion of the University's fiftieth anniversary, and the Jadavpur University Kolkata in 2018.

Personal life and beliefs

Kaushik Basu is married to Alaka Malwade Basu with two children, Karna and Diksha. Alaka is a professor at Cornell's Department of Development Sociology and has been a visiting professor at the Centre for the Study of Regional Development at Jawaharlal Nehru University in New Delhi.

Economic and political views

Kaushik Basu believes that good moral qualities are essential for growth and development within the economy. Honesty, trustworthiness and integrity are important qualities that need to be inculcated in an individual for personal development as well as within the society for development. Basu also feels the need to promote quality thinking in government and public debate.
In the 1992 book, Lectures in Industrial Organization Theory, and in some recent works, he has espoused a "focal point approach" to law and economics. The focal point approach argues that the law cannot change the payoff functions of individuals and the game that people play in life since a law is nothing but some ink on paper. Hence, laws can influence behavior, to the extent they do, only by changing people's expectations of what others may do; and by shifting the focal point in strategic environments. This altered view of law and economics sheds light on how the law impacts on outcomes and why there is such a large gap between the law and its implementation.

Views on bribery

In his paper, 'Why, for a class of Bribes, the act of Giving Bribes should be treated as legal", Basu refers to certain bribes as 'Harassment Bribes' that are given to get what a person is legally entitled to such as a ration card or a passport. In such cases, only the act of taking a bribe should be illegal. This will cause a divergence in the interests of the bribe giver and taker and the bribe giver will be willing to co-operate to help the bribe taker get caught. This view has been under a lot of public debate.

Career

On completing his PhD in London, Basu lectured briefly at Reading University, and returned to India in 1977, to be Reader in Economics and, later, Professor of Economics at the Delhi School of Economics. Over the years Basu has held visiting professorships at the Massachusetts Institute of Technology, Harvard University, the Institute for Advanced Study in Princeton, New Jersey, the Université catholique de Louvain's Center for Operations Research and Econometrics in Louvain-la-Neuve, Belgium, and the London School of Economics, where he was a distinguished visitor in 1993. Additionally, he was a visiting scientist at the Indian Statistical Institute, a public university in Kolkata, India.
Before his appointment as the World Bank's Chief Economist, Basu was the Chief Economic Adviser to India's Ministry of Finance while on leave from Cornell University where he is Professor of Economics and the C. Marks Professor of International Studies. A Fellow of the Econometric Society and recipient of the Mahalanobis Memorial Medal, Basu has published scientific papers in development economics, game theory, industrial organisation, political economy, the economics of child labour, and crafted the traveller's dilemma.
He has worked on aggregating infinite streams of returns, and the axiomatic structures, pertaining to inter-generational anonymity and different forms of the Pareto principle, that such aggregations can satisfy.
In 1992 he founded the Centre for Development Economics at the Delhi School of Economics, and served as its first Executive Director until 1996.
His entry into government in 2009 was a new experience. In an interview with the Bengali magazine Desh, he said his earlier experience of government, when he was setting up CDE, was not a happy one. Letters and phone calls were met with no response. In desperation he went to see the then Finance Minister, Manmohan Singh. Many bureaucrats saw him waiting to meet the Minister. Thereafter their behaviour changed so markedly that he toyed with the idea of writing to the Minister to visit him periodically but not to disturb the Minister, just to sit in his waiting area for a while and go away.
Kaushik Basu is a columnist for BBC News Online, the Hindustan Times, Business Standard and is the author of several books on economics and a play, Crossings at Benaras Junction, which was published in The Little Magazine. He is the editor of the Oxford Companion to Economics in India, published by Oxford University Press, which is a compendium on the Indian economy. His book, Beyond the Invisible Hand: Groundwork for a New Economics, was published in 2011 by Princeton University Press and Penguin, India, and has been translated into Italian, Chinese, Russian, Spanish and Japanese.
On 5 September 2012, he was appointed Chief Economist at the World Bank.
Kaushik Basu was the president of the Human Development and capabilities association founded by Amartya Sen which promotes high quality research in areas of human development and capability. He is the Editor of Social Choice and Welfare, Associate Editor of Japanese Economic Review, and is on the Board of Editors of the World Bank Economic Review. He has been elected to take over as president of the International Economic Association in June 2017, and to serve a three-year term thereafter.
Kaushik Basu is the motivation behind Arthapedia, an online portal that provide explanations to the concepts used in Indian public policy to assist its understanding among citizens.
He created Dui-doku, a competitive two-player version of Sudoku.
While working at the World Bank, Basu also taught courses on game theory at the George Washington University in Washington, D.C. He writes monthly columns for Project Syndicate.
Basu currently teaches at Cornell University, where he has a joint appointment as an economics professor in the Department of Economics and the SC Johnson College of Business.

Awards and honours