The World Bank has a new chief economist: Kaushik Basu, currently chief economic adviser to the Indian finance ministry and otherwise a professor at Cornell. He follows China’s Justin Lin, another high-profile appointment from the Brics.
With the Bank playing a smaller role than formerly in financing development, its views on economics also carry less weight. The flagship World Development Report used to host some fierce ideological disputes, one of which a decade ago caused another Cornell economist to quit as head of the report (and produce a remarkably illuminating paper describing the unnecessarily polarised debate within the discipline).
But the Bank still has the capacity to start debates, and one particular idea of Basu’s seems a likely candidate. He created a stir by publishing a proposal on the highly charged (particularly in India) question of corruption, suggesting that giving bribes be legalised and only bribe-takers prosecuted. There are sound incentive-based reasons for this – it encourages those asked for bribes to report them to the police – but one can imagine why it might be controversial to let bribers go free. Read more