"Economic progress is not about capitalising on opportunities, but upholding values"
CHENNAI: It is not economic policy alone but a combination of factors, including social variables and culture, which is behind India's growth in recent years, leading economist Kaushik Basu said here on Thursday.
Underlining the significance of and connection between social norms and economic growth, the Professor of Economics at Cornell University said that "underlying changes in societal behaviour" helps in the economic development of the country. He said that even after recognising social norms, economists tended to ignore them, as it was difficult to formalise the norms. He was delivering a lecture on `Role of social norms in economics' at the Madras Institute of Development Studies (MIDS).
Prof. Basu, who is also the C. Marks Professor of International Studies and director of the programme on Comparative Economic Development at the university, pointed to the need for countries to uphold the values. Qualities like trustworthiness and honesty mattered most in trade and business. In international trade, group characteristics served as a parameter for judging a person. Economic progress is not about capitalising on opportunities, but upholding values, he said.
Noting that people attributed the overall good aggregate growth of India to reforms, without realising that the take-off was predicated on a package, he said if the liberalisation process had been undertaken in the 1950s the country would have turned into a banana republic.
Prof. Basu underscored the importance of trimming the bureaucracy.
MIDS chairperson M. Anandakrishnan said Prof. Basu had been with many of the prestigious institutions around the world.
Institute director Padmini Swaminathan said Prof. Basu had won many awards and authored 20 books.