Wednesday, September 5, 2012

Kaushik Basu new World Bank Chief Economist

Kaushik Basu today was named the next Chief Economist at the World Bank. His work on child labor has been extremely influential to me and I thought I would take the opportunity to discuss it. I remember in undergrad debating with students who were part of an organization called students against sweat shops that banning sweat shops might not be the best idea and that the relationship between trade and child labor is extremely complex. Basu's models of child labor really cut through that complexity. His 1998 paper in the American Economic Review with Van presents a model that was understandable and extremely policy relevant to me as a first year grad student (although the math might not be approachable to the layman). It shows under what conditions a ban on child labor for exports can help or hurt the poorest in a developing county. As Basu's work shows in many cases the answer isn't clear. Related I like this work with Zarghamee from the Journal of Development Economics  that shows under what conditions boycott products that use child labor may hurt or help.

I also always think of Basu when waiting for people who arrive late to a meeting. Writing with Weibull this essay discussed the culture of lateness that seems to persist in many poor countries (summarized here in the New Yorker).  In short in a country where people are normally late it is best to be late yourself creating a culture of chronic lateness.

I look forward to seeing how Dr. Basu uses his position at the World Bank.
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