Kaushik Basu’s “Journal” avoids seriousness and delves into political worlds

Kaushik Basu cannot be accused of laziness. Research articles, books and newspaper columns come out of him in a constant stream. His latest book, Policymakers’ Journal: From New Delhi to Washington DC (Simon and Schuster India), is a journal covering two periods in the political fields.

Policymakers’ Journal: From New Delhi to Washington DC, Kaushik Basu, Simon and Schuster India.

He joined the Ministry of Finance in India for three years as Chief Economic Advisor (CEA) from 2009, one year after the global crisis of September 2008. From there he moved to the World Bank as a Chief Economist (and Senior Vice President) during 2012-16. The book is not a serious examination of economic policy, covered in a previous book, but rather is a conspiratorial invitation to the reader to take a peek inside political worlds, to marvel at the people who ‘he meets and laughs with him about what’s going on there. Raghuram Rajan’s blurb describes the book as “interesting, funny and insightful”.

Although the book claims to be only “impressions of the moment” noted at the time, later source insertions in some cases detract from the immediacy of a true diary. The December 25, 2009 entry contains a lengthy essay on Amartya Sen, the author’s longtime doctoral guide and mentor, who dined with the Basus that night.

Kaushik Basu’s humor stems from a delightfully privileged sense of his own clarity of speech and thought, as he contemplates a less blessed world. To quote his first day of mandate at CEA: “The problem is that I speak clearly. The art of political speech is to say things that make sense but are impossible to pin down. No one can say that what you said is wrong because no one can understand what you said.

Here is a later entry in my journal: “When it comes to creative and analytical thinking, I try not to, but I feel contempt for most people, including successful academics. I always feel like I see through issues in a much deeper, much more transparent way than they can. “

His expertise in carving a game theory sword through the thicket of microeconomic issues of development policy did not equip him for a context where the dominant issues were how to contain and reverse the Indian response to the call. of the G-20 for a concerted fiscal stimulus in the consequences of the global crisis and the inflationary pressures which ensue from it. He launched a series of working papers at the finance ministry, one of which in March 2011 aimed to show that the then raging corruption could be stopped in its tracks with a law protecting those who report corruption. The point where corruption stings the ordinary citizen is far removed from where it draws its sanction. In reporting an incident, the victim would face a Goliath whose size and muscles could go so far as to eliminate him completely. His best bet would be to remain anonymous.

Kaushik Basu admits that he saves money for the sake of exercising his logical skills, not to make the world a better place. But he says he put aside his pursuit of pleasure and got into policy making to “try to raise the standard of living and well-being of the nation I was responsible for.” Not entirely at his expense. The job of CEA, in managerial jargon, is a staff function and not a hierarchical function. The only deliverable is the Annual Economic Survey, which must be presented to Parliament on the eve of the Union budget. The CEA is free to express its opinion in the Economic Survey, and has enough attached staff and access to government data to make its dearest research dreams come true. However, the CEA is not in the line of command along which policy is actually designed and executed, within the finance ministry or beyond. The strange file could be tagged to him for his opinion. However, one cannot blame Basu as CEA for leaving the Indian economy with a wild public deficit, high inflation and slow growth, when he left in 2012 after a three-year term.

Due to his close ties to Prime Minister Manmohan Singh, he has had more opportunities than the typical CEA – being called upon to present their position on an issue directly to Cabinet, or to represent India at G- meetings. 20.

Former CEA Kaushik Basu with former Prime Minister Manmohan Singh. Photo: Twitter / @ kaushikcbasu

The CEA is also at the head of the Indian Economic Service (IES), set up to generate a qualified cadre of professional economists, with experience of the Indian system gained by climbing the ranks. Basu found them a useful source for “so many delicate aspects of Indian policymaking that I still don’t fully understand. I have to keep calling them to explain things to me. He is too modest to say what he has done for them in return, strengthening service or enriching them intellectually.

To craft a successful policy in India, one needs to be a fiscal plumber by profession, knowing the budget heads and how funds flow and the points at which they can be secretly or openly blocked. It should be noted that the limits imposed by law on budget deficits have led to a number of schemes, such as the postponement of expenditure in an apparently legitimate manner. (Basu sarcastically comments on his wife Alaka’s struggles to withdraw her deferred salary from a public university: “Hats off, India”). These delays are reflected among other things in the high working capital needs of Indian companies. The CEA is actually in a good position to do this kind of rude work, but unfortunately many of them, unfamiliar with the Indian system, or interested in nothing but themselves, didn’t even know not that such work had to be done. .

The second section of the book deals with the author’s tenure as Chief Economist of the World Bank in 2012. The focus is more serious, perhaps inspired by the size of the “biggest office I’ve ever had. busy “. Sometimes the old irreverence returns. When asked to speak on a subject he knew nothing about, he relied on the experience of India which “had trained me to speak without content”.

The World Bank has offered a much larger world canvas than India could. The Chief Economist chairs a large division of the World Bank responsible for the collection, dissemination and analysis of statistics, along with a research group of highly trained empirical economists. The division had already started the annual Ease of Doing Business report, but Basu opened a second office for them in Malaysia, a great location choice. Malaysia is the only country to have successfully challenged the policy prescriptions of the International Monetary Fund, during and after the East Asian crisis of the late 1990s.

Basu is proud to have pushed the World Bank to officially adopt the twin goals of eradicating extreme poverty by 2030 and “promoting shared prosperity”, measured by the well-being of the poorest 40% of the country. population in each country, with a commitment to publish data on the second indicator each year.

At the same time, he did not care to seize the abundant opportunities he had to actually improve the conditions facing the poorest deciles. On a visit to one of South African townships, a legacy of apartheid, he describes how the hapless residents live on land without ownership or tenancy, with raging crime and transportation costs prohibitive for daily jobs in cities. He is content to recall an article he wrote in the Economic review on the importance of property and rental rights, and leave it at that. At his subsequent dinner with South African Finance Minister Pravin Gordhan, he could have lobbied for a subsidized bus service to these settlements. If he did, he doesn’t say it. Spatially contextual interventions like this are what reduce the poverty bite.

Basu appreciated the work of the World Bank more than that of India. He interacted with the engines and agitators of the world. He walked from his World Bank office to the White House to attend a meeting called by President Obama in preparation for his second trip to India.

The best segments of the book are the memories triggered by encounters with great economists, like Hal Varian and Kenneth Arrow. Working economists can relate to the blessing of having good journal editors like Varian, who exercise judgment on referee reports, or the sense of uplift that comes from having gentle giants like Arrow at the helm. of the profession. Basu has been able to create opportunities for relentless journeys to charming parts of the world, the descriptions of which turn segments of the book into a long travelogue.

In all fairness, Basu sometimes makes fun of himself. He was flattered when John Nash attended one of his lectures, during the five minutes he was awake. He is aware that policies are “major life-affecting decisions that we make with so little understanding of the consequences of those actions.” He even laughs at his own vanity. During a mega-speech in Dhaka, when the president introduced him as the Shah Rukh Khan of academics, “I tried very hard not to nod my head, but I think I did. “

“Either way, life is so lucky.” Disarmingly said upon his appointment to the World Bank, Kaushik Basu continues to be lucky. He sleeps at Cornell University, that a more picturesque place or a suitable professional environment can hardly be imagined. His country awarded him a Padma Bhushan even before his appointment to CEA. What more can you want?

Indira rajaraman was a member of the 13th Finance Committee (2007-09) and a member of the central board of the Reserve Bank of India for a four-year term 2011-15.

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