TIS Conference - Institutions, Law and Development

1. Institutions, Law and
Development
Kaushik Basu
Sr. Vice President & Chief Economist
World Bank
UNU-WIDER International Development Conference
Hanoi, Vietnam
June 29, 2014

2. Outline
• Methodology: Theory, Economics & Beyond
• My engagement with the Law
– Bribery and the control of corruption
– India’s Labor Laws
• The Standard View of Law and Economics
• The Focal Point View of Law and Economics
• India’s Food Rationing System

3. Nash Equilibrium & the Focal Point (I)
• Two persons play this game
• Choose one of the following numbers:
7 18 93 100
• If both choose the same number, both players
get $1000. If they choose different numbers,
they both get 0

4. Nash Equilibrium & the Focal Point (II)
• Map of a village
Hut Pond Flag pole