This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument.

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Corruption and Growth

https://link.springer.com/content/pdf/10.2307%2F3343168.pdf

Development as Freedom

A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

Trust: The Social Virtues and the Creation of Prosperity

Amartya Sen (1933–) was born and educated in India before completing his doctorate in economics at Cambridge University. He has taught in India, England, and the United States and is currently the Lamont University Professor at Harvard University. He is one of the most widely read and influential living economists. His books have been translated into more than thirty languages. In 1998, he was awarded the Nobel Price in Economics for his work on welfare economics, poverty and famines, and human development. He has also made major contributions to contemporary political philosophy. In this essay, he proposes that alternatives be appraised by looking to the capabilities they provide for individuals rather than only by individual utilities, incomes, or resources (as in commonly used theories). Introduction Capability is not an awfully attractive word. It has a technocratic sound, and to some it might even suggest the image of nuclear war strategists rubbing their hands in pleasure over some contingent plan of heroic barbarity. The term is not much redeemed by the historical Capability Brown praising particular pieces of land – not human beings – on the solid real-estate ground that they ‘had capabilities’. Perhaps a nicer word could have been chosen when some years ago I tried to explore a particular approach to well-being and advantage in terms of a person's ability to do valuable acts or reach valuable states of being.

Capability and Well-Being

This paper uses efficiency wage theory and the existence of community-based sharing to hypothesize that labor markets in developing countries have multiple equilibria – the same economy can be stuck at different levels of unemployment with different levels of wages. The model is meant for developing economies where wage-productivity links are discernible and income-sharing among the poor is prevalent. It seems reasonable to posit that in such an economy more unemployment leads to more income sharing. The main results are generated combining this claim with a theoretical demonstration of the fact that more sharing increases unemployment rates. As corollaries, we show that (1) within the same society, two different racial groups that may be ex ante identical can have different levels of unemployment and wages in equilibrium and (2) the imposition of a legal minimum wage can raise employment.

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A theory of efficiency wage with multiple unemployment equilibria: how a higher minimum wage law can curb unemployment

The International Labor Standards (ILS) movement, meant to be an initiative to promote better working conditions in the Third World, has been widely opposed by Third World governments and workers. This opinion from the South, however, gets little representation in international forums. Is the dissent from the South based on a misperception of the South of its own interests or is it founded on a realistic perception of global politics? The essay argues that it is the latter. The contemporary world has seen a bewildering number of initiatives or suggestions for ILS, to be coordinated through the offices of the UN, ILO and WTO. This paper argues that, while global opinion has become more sophisticated in recent years, the existing initiatives are ill-conceived and are likely to have undesirable fall-outs. At this time, when the institutions of global democracy are ill-developed, ILS is best left to individual nations and only a minimal global coordination. There should also be extra effort to give voice to opinion from developing countries in whose ostensible interest these standards are being developed. Further, this global coordination is best done through the ILO and the UN. The WTO, the way it currently functions, is not the appropriate body for enforcing labor standards. In the long run, there must be an effort to democratize global organizations, and only when that is done can global organizations be seriously entrusted with the task of promoting higher labor standards.

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Compacts, Conventions, and Codes: Initiatives for Higher International Labor Standards

Traditional measures of unemployment were only concerned with the total number of people unemployed. In recent years such measures have come under criticism for ignoring those whomay not currently be unemployed but are vulnerable, that is, they live under the risk of becoming unemployed (see Cunningham and Maloney (2000), Glewwe and Hall (1998), Thorbecke (2003)). Alongside this criticism a small but rapidly growing literature is emerging that looks at various aspects of vulnerability and tries to measure it (Amin, Rai, and Topa (2003), Ligon and Schechter (2003), Pritchett, Suryahadi, and Sumarto (2000)).1 There is a presumption in much of this literature and the policy statements of international organizations and governments that since vulnerability is bad, we should craft policy to rescue people from being vulnerable. We argue in this paper that such a prescription is wrong, or, at best, misleading. Under a variety of “normal” situations, having some people vulnerable to unemployment makes the aggregate problem of unemployment less severe (and more bearable). The aim of this paper is to explain this normative stance of ours, to develop a class of unemployment measures that take account of this stance, and then to apply it to US and South African data. The explanation of our normative position is not complicated and the general point can be made simply enough. Suppose there is a society in which, currently,

Unemployment and Vulnerability: A Class of Distribution Sensitive Measures, its Axiomatic Properties, and Applications

Identity, Trust and Altruism: Sociological Clues to Economic Development

INTRODUCTION. 1. Overview 2. Agriculture, Rural Economy, and Natural Resources 3. Industry 4. Services 5. Financial Sector 6. External Sector 7. Government Policy 8. Infrastructure 9. Population, Labour, and Employment 10. Human Development APPENDIX CONTRIBUTORS

Kaushik Basu

Papers

A theory of efficiency wage with multiple unemployment equilibria: how a higher minimum wage law can curb unemployment

Compacts, Conventions, and Codes: Initiatives for Higher International Labor Standards

Unemployment and Vulnerability: A Class of Distribution Sensitive Measures, its Axiomatic Properties, and Applications

Identity, Trust and Altruism: Sociological Clues to Economic Development

The Concise Oxford Companion to Economics in India