The Republic of Beliefs: A Book Review

By Shruti Singhi

The Book is an intellectual enterprise by Mr. Kaushik Basu, to highlight the need for an economic approach to law and policy making, especially in the new world order– which is ever so interconnected owing to globalisation and the evolution of technology. 

Basu adopts a peculiar approach, in terms of format, where he ends the book with a ‘prologue’. Such prologue calls for an evolved new world regulation order beyond state boundaries to cater to an interconnected global population which is disproportionately influenced by political, legal, and policy decisions being taken in a faraway land. Basu concludes the book with the such ideas while highlighting the urgency of establishing systems and regulatory framework for problems emerging in a society which has evolved more rapidly than the systemic and regulatory frameworks governing and fostering it have. 

With examples of the impact of the US presidential elections on the lives of a Mexican common man; and the existing fiscal and monetary policies in Malaysia which directly impact employment of a sizable Indonesian population, Basu highlights uncomfortable but real problems of wealth inequality and the eluding democracy in the presently existing, evolved world order. 

However, Basu builds the premise of this book with neo-classical economic principles of game theory and associated models as well as behavioral economics in view of legal principles; especially in relation to enforcement of laws. Basu uses such economic concepts and principles to demonstrate that: contrary to traditional legal principles, influencing popular beliefs based on economic models may be more effective for gaining desired results. 

Using such concepts, Basu builds models to demonstrate how stakeholders act depending on the actions of other stakeholders. Thus, using such models, Basu gradually builds on situations where enforcement of a law or a policy requires the presence of a state actor, to models which only require a looming presence of a state actor for its successful implementation and finally the absence of state actors altogether. In this manner, Basu addresses one of the fundamental problems in International Law, i.e. absence of an enforcer. 

The style of writing of the book is simple to follow and accessible to laypeople. The book proposes an important perspective on policy and law making, especially in a nation state setting wherein the established power structures and institutions would benefit in adopting an approach to law and policy as the book demonstrates, in a conscious manner. Especially in the Indian policy and legislature, a traditional approach to lawmaking is the norm.

The proposition that the applicability of such concepts in International law while, in some cases– for instance in business laws, may prove to be beneficial; the applicability of the same in many other scenarios may be farfatched and would likely be impossible for various reasons.

Power dynamics among countries are skewed in the global political scenario. Therefore, the influence of more powerful nations would have a disproportionate impact on the less powerful ones. Nevertheless, for such a proposed system of a ‘Global Constitution’ to work in a global scenario, it is necessary for an underlying enforcement structure to be in place for preventing the exploitation of the system. To this extent, the argument of Basu may be flawed that theories of economics like the Focal Point Approach, Game Theories etc. would work without an underlying enforcement mechanism at that level.