From theory to practice

See here for a quick summary of the recent debate over Prof Kaushik Basu's idea of legalising bribe-giving in India. I am not reviewing the debate. I just want to put out there, the last couple of lines by Jean Dreze, from his critique of Kaushik Basu's idea.

Creative and thought-provoking as it may be, Kaushik Basu’s paper is symptomatic of a common disease in the economics profession: the tendency to make sweeping policy recommendations based on analytical models that have a very limited domain of validity. In this case, the problem is compounded by analytical flaws as well as tensions between economic arguments and ethical concerns. Basu’s proposal is excellent fodder for intellectual debate, but rather dangerous as far as real-world policy-making is concerned.

Needless to say, I agree with Dreze. Important lesson: must remember at all times, when talking/thinking real-world policy.