An Economist in the Real World: The Art of Policymaking in India

In This Review

An Economist in the Real World: The Art of Policymaking in India
By Kaushik Basu
MIT Press, 2015
256 pp.

This book offers fewer anecdotes about the politics of policymaking than one would expect given its title. But Basu, who was the chief economic adviser to the government of India under Prime Minister Manmohan Singh from 2009 to 2012 (and who is now chief economist of the World Bank), provides lucid discussions, suitable even for non-economists, of issues as varied as inflation management, taxes, and poverty alleviation. His main argument is that simplistic policies produce unintended consequences as market actors respond in their own ways to new incentives. But he argues that India in recent decades has gotten economic policy more right than wrong. The country’s initial “costly investment” in democracy has paid dividends by generating an inclusive policymaking process, which may be unwieldy but maintains social stability even in the midst of profound change. He believes that if Indian governments put a few more smart reforms in place, the country can enter a “high-growth path” that will continue for decades.

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