Syndicate content

Kaushik Basu's blog

Targets and Measures, Poverty and Sharing

Kaushik Basu's picture

In his latest Annual Letter, Bill Gates points to the power of measurement. Change, he reminds us, is often incremental; and so, unless we have a good yardstick, it is difficult to know if the small move we made was in the right direction. Not surprisingly, in the world of technology, new ways to measure energy creation and a micrometer able to gauge miniscule distances, played a vital role in promoting progress. Gates is right in stressing this and that is the reason why even in social and economic ventures, it is important to develop measures that track how we are doing.

Interestingly, the publication of Gates’ letter coincides with the ongoing initiative within the World Bank Group to define targets and measures of well-being that the Bank as a multilateral agency will promote and pursue. We hope to soon be in a position to place our measures and targets in public space. This blog is meant to give readers a flavor of the issues involved and to welcome their suggestions.

Let me begin by advising readers that, when reading Bill Gates, it is important to keep in mind that there is more to learn from successful people’s lives than lines. Gates’ Annual Letter on measurement is an important take away, but we must not forget what his life amply demonstrates--that to focus solely on measurement is to risk missing out on some essential features of life which may be nebulous and not quite measureable but nonetheless important.

Managing Risk for Development

Kaushik Basu's picture

Suppose a political leader implements a policy that results in an economic crisis in the sense that, had he not implemented the policy in this instance, the crisis would not have occurred. In such a situation we are inclined to come down heavily on the leader’s policy and castigate the decision. This would however be a mistake.

To see the mistake—as to see so many things in life—it is worth converting this to a more abstract problem. A (fair) dice is about to be rolled; but before that you have to choose between A and B. If you choose A and the dice outcome is 1 or 2, or you choose B and the dice outcome is 3, 4, 5 or 6, all will be well. Otherwise, there is a major food crisis. What should you do? A little thought makes it clear that you should choose B. If after that the dice shows up on 1, there will of course be a crisis, but that disastrous outcome would not render your decision wrong. Indeed, if you had to play the game again, you should make the same choice.

Jobs, plateaus, dividends, skills and data

Kaushik Basu's picture

Jobs have been at the center of my life since I took up my own new job as World Bank Chief Economist on October 1. This began within hours of my joining the Bank, when I participated in the press launch of the World Development Report 2013 on Jobs. Following that, my interactions at the Tokyo Annual Meetings of the World Bank and IMF also brought the jobs issue into high relief, with ministers and policymakers from around the world reacting to the WDR, especially in some of my corridor conversations with them.
 
I have a longstanding interest in labor-related issues, the role of labor laws, and on the impact of privatization on jobs. So I was pleased by the clairvoyance of the World Bank in choosing jobs as the topic for the 2013 World Development Report, much before the Bank knew that it would choose me to be the Chief Economist.

Perspective from a new World Bank Chief Economist

Kaushik Basu's picture

The first week as World Bank Chief Economist has left me excited, on the trot, (not to mention, slightly exhausted) and more convinced than ever that John Maynard Keynes was right when he wrote in the General Theory that the course of history, for good or for bad, is determined more by ideas and opinions than vested interests. I assert this with some confidence because of my somewhat unusual career experience, beginning with academic research, writing and teaching to being thrown into the deep end of the policymaking pool, when, in 2009, I was appointed India’s 14th Chief Economic Adviser and the first with no taint of prior experience in government.

I feel privileged to have this new challenging job and hope to engage with readers of this blog as I become more conversant with the Bank's work and also with writing a blog, which I have never done before, my social interaction on the web thus far being restricted to the 140-character tweet.

During the course of many G20 and other high level meetings with policymakers when I was still wearing my India hat, I was struck time and again by the fact that having a critical mass of people who are well-intentioned and susceptible to good ideas can do so much to break the toughest of impasses, whether in trying to decide on monetary and fiscal policies or in targeting welfare benefits or in battling poverty.

Pages