Washington: Having served World Bank as its chief economist for about four years, India’s former chief economic advisor Kaushik Basu says he will not take up any position in the Indian government and plans to return to Cornell University and focus on his research projects.
Basu also said that his experience at the World Bank taught him that a lot of policy in today’s global world has to step beyond individual nations and cautioned against attempts by big corporations attempting to “play one nation against another”.
“We need multi-lateral effort, we need global initiatives. This is true from broad monetary policy to micro tax policy. The big corporations today straddle multiple countries and can easily play one nation against another. This global policy perch that my job provided me was very exciting,” Basu said in an interview on his last day in office this Friday as senior vice-president and chief economist at World Bank.
Basu, whose name was earlier doing the rounds among probable contenders for the post of RBI (Reserve Bank of India) Governor as a successor to Raghuram Rajan, ruled out taking up any position from the Indian government. Incidentally, Rajan has also returned to academia to teach at Chicago Booth School of Business after his tenure at RBI ended on September 4.
To a question on any possible new role in the Indian government, Basu said, “Not now, and for two reasons. First, the government will not offer it, and second, I won’t take it. My most important task is a research project on understanding why laws are so often so good on paper but so poorly implemented.”
“This will involve economic theory, law, game theory and a lot of thinking. I have some exciting ideas and my plan is to focus on these over the next several months.” Basu, who had served as chief economic advisor in India during the previous UPA government, will resume his academic career at Cornell University’s new campus in New York but will continue to write from to time.
He said his earlier experience with the Indian government helped him a lot at World Bank, saying it can be “very bureaucratic”.
Talking about his experience at the World Bank, Basu said, “Today is my last day here. I joined the Bank exactly four years ago. It has been a wonderful experience. Being Chief Economist of the World Bank allowed me to bring the best ideas from the world of economic theory to policymaking.
“I had the opportunity of fascinating interactions with not only national leaders and Finance Ministers, but ordinary workers, farmers, and civil society activists in remote parts of the world. This involved learning but also gave me the opportunity to carry economic theory to the real world.”
Basu said there are policy practitioners who will never know the joy of single-minded pursuit of ideas and then there are research economists, who don’t get to experience policy at work on the ground.
"I am instinctively a researcher, and can spend disproportionate amount of time pursuing one inquiry. It was pure good fortune on my part that I got to experience and combine both-the mythical theory and practice. There is of course adjustment involved in this. The World Bank can be very bureaucratic. Luckily, I had had nearly three years' experience in GOI before coming here.
"As a result, I quickly found myself quite at ease dealing with the bureaucracy as well as the politics, which all such large organisations have. Thereafter it was not hard to carry out the various plans I had for the Bank, from initiating new knowledge work, through improving its many products, to enhancing interaction between research and practice," he added.
In his advice for those in leadership roles, Basu said too many people spend too much time trying to get their word in, though the secret of success is not to waste time getting your say, but to focus, instead, on getting your way.
"I do feel good about what I achieved; but last week as I was clearing my office, the largest folder was one marked 'To do'. That always gives a sinking feeling but I suppose that is part of life," he said.
