Indian Economists and Their Ideas
Kaushik Basu: Child Labour and Policy
How Kaushik Basu studied child labour and the economics of law, served as India's Chief Economic Adviser and became World Bank chief economist.
Kaushik Basu (born 1952) is an economist at Cornell.
Child labour
- Basu and Pham Hoang Van developed a 1998 model showing child labour can be a “trap”: when adult wages are low, families send children to work, pushing adult wages lower.
- Well-designed bans could shift economies to a better equilibrium, but poorly designed ones could harm families.
Policy roles
- Chief Economic Adviser to India’s Ministry of Finance (2009-2012).
- Chief Economist of the World Bank (2012-2016).
The bribery proposal
In 2011, Basu proposed making bribe-giving legal (for “harassment bribes”) so bribe-givers would report officials, sparking debate.
Books
- Beyond the Invisible Hand (2011) critiques assumptions about free markets.
- The Republic of Beliefs (2018) on law and economics.
Legacy
Basu combines theory with practical policy.
The harassment bribe
Basu argued that if paying a bribe to get a rightful service weren't a crime, victims would report corrupt officials more often.
Thinking banning child labour always helps
Basu showed bans must be designed carefully.
Key takeaways
- Basu modelled child labour as a potential trap.
- He was Chief Economic Adviser in 2009-12.
- He was World Bank Chief Economist in 2012-16.
- His 2011 bribery proposal sparked debate.
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