Law as the Focal Point: An Analysis of Kaushik Basu's Theory

This article provides an in-depth analysis of Kaushik Basu's economic thought, challenging Gary Becker's traditional model. Instead of viewing law solely as a system of penalties and incentives, Basu defines it as a "focal point"—a signal that allows social actors to coordinate their actions without necessarily altering the physical parameters of reality. The article explains the "ink on paper" metaphor, pointing out that law gains force only when it becomes embedded in the metabeliefs of citizens and enforcers. The author analyzes institutional stability through the lens of Nash equilibrium and proposes a vision of a minimal global constitution (ius commune humanitatis) that could address contemporary global challenges and the asymmetry of economic incentives at the macro level.