As chief economic adviser to India’s Ministry of Finance in 2010, Kaushik Basu was convinced that the government’s decision to end price controls on gasoline and diesel was the right one.
But after the announcement of the policy change and a series of media interviews, Basu, then in office for about six months, wrote in his diary that later that night he suddenly felt shaken.
“All of a sudden, we made a decision that would affect millions of lives,” he wrote. “For the 12 or 15 of us involved, it was several days of deliberation but, ultimately, only one decision. Yet it can be of great importance to the nation. How strange life is.
Basu, Carl Marks Professor of International Studies and Professor of Economics at the College of Arts and Sciences, recounts this and many other experiences of his seven years in public life – first in the Indian government, then as as Chief Economist and Senior Vice President of the World Bank – in a new book, “Policymaker’s Journal: From New Delhi to Washington DC,” published in July.
A collection of journal entries noted at the end of days or weeks, edited slightly for clarity, the book does not attempt to detail the economy and politics in which Basu has been immersed, which he has already spoken about. some in “An Economist in the Real World: The Art of Policy Making in India.” “
On the contrary, writes Basu, he has sought to share his thoughts on life on the front lines of economic policy-making and the morals of public life, some of which he hopes can be “reflected upon and hopefully. the, used to shape a better world “.
Readers travel the world with Basu – from the United States and China to Samoa and Tajikistan – and learn about his encounters with world leaders, powerful and economic thinkers, and ordinary citizens struggling with economic hardship.
Basu had no government experience when Prime Minister Manmohan Singh appointed him chief economic adviser to India in 2009, a post he held for almost three years. Recognizing that an unusual transition would be worth recording and bringing an outsider’s objectivity to the experience, Basu began keeping a diary of his first day at his North Block government offices in New Delhi on December 8, 2009.
At first, he felt overwhelmed by the “shock and fear” of moving from the cloistered world of academia to the hectic world of politics and politics, writes Basu. He immediately faced the economic challenges of the aftermath of the global financial crisis and soaring inflation, making late-night decisions that attendees knew could spark protests or turn the stock market upside down the next day.
He describes the fascination with seeing how government works from the inside out, as well as some frustrations of learning how to operate in a political system that is resistant to change and in which people often do not say what they think.
“It is the lack of imagination and the hold of outdated ideas on political leaders and career bureaucrats that tend to block good policy,” he wrote on February 19, 2010. “I am also now convinced that economics as a discipline is not just an astonishing intellectual achievement but it is, in practice, a very useful discipline.
Starting a four-year term at the World Bank in 2012, Basu oversaw a team of around 300 economists supporting the bank’s mission to help governments reduce poverty through financial and technical assistance. His work there, he said, was not so closely involved in policy making but had a “breathtaking” scope, from missions to distant countries to decisions on how to calculate. and share global data on poverty. He sought to convey, he said, that economic development is interdisciplinary and “depends on much more than the economy.”
Reflecting on those years from his home in Ithaca in December 2020, as the world struggled with a pandemic and polarized politics, Basu wrote that today’s political challenges are similar but have a new urgency.
Addressing climate change and creating a more equitable world, he suggests, will require more radical – or what now seems radical – and progressive policies, including greater redistribution of wealth. The passion for finding solutions, he argues, must go hand in hand with intellectual engagement.
“It is for this reason that the two worlds in which I live – those of activism and policy-making, and research and analysis – are deeply intertwined,” he writes. “Human beings need the intellect as well as the moral compass. We need to invest both to tackle the immediate challenges we face now, and our long-term challenges of poverty, inequality and discrimination.