An Economist in the Real World
In December 2009, the economist Kaushik Basu left the rarefied world of academic research for the nuts and bolts of policymaking. Appointed by the then Prime Minister of India, Manmohan Singh, to be chief economic adviser (CEA) to the Government of India, Basu—a theorist, with special interest in development economics, and a professor of economics at Cornell University—discovered the complexity of applying economic models to the real world. Effective policymaking, Basu learned, integrates technical knowledge with political awareness. In this book, Basu describes the art of economic policymaking, viewed through the lens of his two and a half years as CEA.
Basu writes from a unique perspective—neither that of the career bureaucrat nor that of the traditional researcher. Plunged into the deal-making, non-hypothetical world of policymaking, Basu suffers from a kind of culture shock and views himself at first as an anthropologist or scientist, gathering observations of unfamiliar phenomena. He addresses topics that range from the macroeconomic—fiscal and monetary policies—to the granular—designing grain auctions and policies to assure everyone has access to basic food. Basu writes about globalization and India’s period of unprecedented growth, and he reports that at a dinner hosted by Prime Minister Manmohan Singh, President Obama joked to him, “You should give this guy some tips”—“this guy” being Timothy Geithner. Basu describes the mixed success of India’s anti-poverty programs and the problems of corruption, and considers the social norms and institutions necessary for economic development. India is, Basu argues, at an economics crossroad. As CEA from 2009 to 2012, he was present at the creation of a potential economic powerhouse.
About the Author
Kaushik Basu is Senior Vice President and Chief Economist at the World Bank and Professor of Economics and C. Marks Professor of International Studies at Cornell University. He is the author of Beyond the Invisible Hand: Groundwork for a New Economics.
“This is a beautifully written and engaging book describing Basu’s years as chief economic adviser to the Government of India. An Economist in the Real World reveals a brilliant and lively mind combined with a compassionate humanity. But more than that, it conveys an understanding of the rich complexities of India, the challenges and the hopes of this great subcontinent with more than a billion people. A must-read for anyone interested in either development or India—or who simply wants to learn about the adventures of an academic entering the terrain of high-stakes politics.”
—Joseph E. Stiglitz, Nobel Laureate in Economics, 2001
“An Economist in the Real World is a book of tales regarding what economic policy looks like from the inside out. It is also a book of interpretation, in which Basu’s reflections explain in a deep way why economic policy so frequently goes wrong. Like all great books, and especially those that are a lot of fun, it is to be read, and appreciated, by many different audiences and at many different levels.”
—George Akerlof, Nobel Laureate in Economics, 2001
“Kaushik Basu offers a unique perspective on India's economic development that is both analytically rigorous and deeply personal. He speaks with authority as a noted economic theorist who has been chief economic adviser for the Government of India and chief economist for the World Bank. If you want to understand the great problems and successes of economic development in our time, this book is a good place to start.”
—Roger Myerson, Nobel Laureate in Economics, 2007
“When a top-notch theorist is given a leading policy post, we anticipate getting interesting musings on the application of economics to politics. But when that post concerns as complicated and chaotic an economy as India’s, the reflections turn out to be utterly fascinating.”
—Eric S. Maskin, Nobel Laureate in Economics, 2007
“One of the important lessons of this wonderfully interesting book is that sophisticated economic reasoning can be very fruitfully used to tackle extremely complex practical problems. Since that powerful lesson comes here accompanied by wit and humor—typical of Basu’s writings—the reader is at once entertained and amused as well as illuminated. It is hard to ask for more.”
—Amartya Sen, Nobel Laureate in Economics, 1998
“From my corporate perch, I approach tomes on economics with some trepidation. However, An Economist in the Real World turns out to be a treat. Filled with careful deductive reasoning and free of jargon, it is an important book that urges government, corporations, and civil society to come together to tackle India’s problems and realize India’s full potential.”
—Anand Mahindra, Chairman, Mahindra Group