Book Review: The Republic of Beliefs by Kaushik Basu

Instead of a career as a lawyer, Kaushik Basu chose one as an economist and among his experiences, he worked as a policy maker, coming in contact with problems of law and economics from corruption to poverty and the right to food and education.

The intersection between law and economics is in fact what interests Basu in The Republic of Beliefs, considering what makes citizens follow some laws and not others, the same that are not even enforced.

The importance of working with law and economics together started in the beginning of the Twentieth century, when antitrust laws that curbed collusion between US firms started to damage the same economically. Therefore, in 1918 the Webb-Pomerene Act was passed to enable some firms to avoid the norm.

Laws are not even always just or fair, and haven’t been in history. Basu has among his intentions removing some past controversies that, according to him, were not necessary. Game theory and science are among the basis Basu uses.

India, where Basu has his origins, is taken as an example, including the law that allows the poorest to collect a certain quantity of cereals for free. Shops that should distribute them, however, sell them for a higher price and just tell the rightful owners that provisions are finished. The problem with the law, states Basu, is that it is written with a robotical distribution in mind, not taking into consideration prevailing mentality. A solution, Basu suggested, was to give the poor vouchers and allow them to buy their grain from whoever they preferred.

Basu in subsequent chapters talks about critiques in the field, social norms, corruption and such.

The book, published by Princeton University Press, can be preordered before its release on June 12th.