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16044 Sef-1296 Public Disclosure Authorized Bankers X/r ~witb a lvission Public Disclosure Authorized The Presidents of the World Bank, 1946-91 Public Disclosure Authorized Jochen Kraske with William H. Becker William Diamond Louis Galambos Public Disclosure Authorized >Q ~con v.-E 4 Bankers \ 4 ~~witb a lvission The Presidents of the World Bank, 1946-91 ochen Kraske with William H. Becker William Diamond Louis Galambos Pu b I i shed f or the World Ba nk OXFORD UNIVERSITY PRESS Oxford UniversiryPress OXFORD NEW YORK TORONTO DELHI BOMBAY CALCUTTA MADRAS KARACHI KUAIA LUMPUR SlNGAPORE HONG KONG TOKYO NAIROBI DAR ES SALAAM CAPE TOWVN MELBOURNE AUCKLAND and associated companies in BERLIN IBADAN (C 1996 ITheInternational Bank for Reconstruction and Development / THE WORLDBANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Published by Oxford University Press. 200 Madison Avenue, New York, N.Y. 10016 Oxford is a registeredtrademark of Oxford University Press. All rights reserved. No part of this publication may be reproduced, srored in a retrieval system, or transmirted, in any form or by any means, electronic, mechanical,photocopying, recording, or otherwise,without the prior permissionof Oxford University lPress. Manufictured in the United States of America First printing September 1996 The findings, interpretations, and conclusionsexpressed in this study are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. Photos:All the photographs are from the World Bank photo archives.Page 114, by Fabian Bachrach; first page of photo insert, by Edwin Huffman; last page of photo insert, by Michele lannicci Desigrn:Joyce Petruzzelli Libraryof CongressCataloging-in-Publication Data Bankerswith a mission : the presidentsof the World Bank, 1946-91 / Jochen Kraske ... [et al.]; p. cm. Includes bibliographicalreferences and index. ISBN 0-19-521112-X 1. World Bank-Presidents-Biography. 2. Bankers-Biography. 3. World Bank-History. 1. Kraske,Jochen, 1932- HG3881.5.W57B367 1996 332.1 '532'0922-dc2O [B] 96-34639 CIP Contents Preface vii Introduction 1 Chapter 1 Eugene Meyer: The Bank's First Steps 7 Chapter 2 John J. McCloy: Starting up the Business 35 Chapter 3 Eugene R. Black: Bringing the Developing World to Wall Street 75 Chapter 4 George D. Woods: Transforming the Bank 115 Chapter 5 Robert S. McNamara: Champion of the Developing World 159 Chapter 6 Alden W. Clausen: Navigating in Troubled Times 213 Chapter 7 Barber B. Conable: Dedicated to Public Service 247 Reflections 281 Notes 289 Bibliographical Notes 319 Index 323 Preface W7 hen I accepted the assignmentas the WorldBank Group's historian, my friends and colleagues in the Bank presented me with a set of photographs of the Bank's presidents to decorate my new office. The presidents of the Bank have always been a fascinating subject for the staff of the Bank. Not only were they the source of power in the institution; they were also the ones the staff looked to for sig- nals that would indicate the Bank's primary mission and its opera- tional priorities in a changing world. Thus surrounded by the im- ages of the Bank's past presidents, I felt I should make them the focus of an in-depth inquiry. The general preoccupation with the presidents of the Bank has given rise to a rich store of anecdotes and myths. The growth of the institution increasingly limited the opportunity for direct con- tacts and exchanges of views between the president and the main body of staff members. Remoteness tends to stimulate the imagina- tion. At the same time, it distorts perceptions, just as the passage of time often presents events and personalities in a nostalgically tinted light. These perceptions tend to shape the discussions about what the institution has done, what it is, and what it can be. They affect, in particular, the interpretation of the part former presidents played 'I I viii Bankers with a Mission during their administrations. These perceptions also surface in any discussion about the role of the president and the contribution that is expected of him. To confront these perceptions with the record should not only serve to modify and correct them but also assist the ongoing discussion about the future of the Bank. As far as possible, I have tried to rely on the written record to present the actions of the presidents and the course of their think- ing. Their speeches, especially those to the annual gathering of the Bank's shareholders, present an overview of the challenges faced by the institution and the agenda they adopted to address them. I have been able to supplement the evidence offered by the written record with interviews and informal discussions with former colleagues, as well as with the oral histories they recorded. I would not have been able to complete this study without the active support and assistance of many individuals. I am deeply indebted to the contribution of my associates in the Office of the Bank Group Historian, William Becker, William Diamond, and Louis Galambos. William Becker, professor of history at George Washington University, prepared initial drafts of the chapters deal- ing with Eugene Meyer, A. W. Clausen, and Barber Conable and compiled most of the material used in these chapters. William Dia- mond, a former staff member and trained historian, assembled the material for the McCloy chapter and prepared an initial draft of it. Louis Galambos, professor of history at Johns Hopkins Univer- sity, contributed to the conceptual design and focus of the book. All three followed the production of the various drafts in the course of regular monthly meetings. They pointed out inconsistencies, elaborated the historical context, and provided invaluable edito- rial assistance. Many others aided generously and graciously in the preparation of the text by drawing my attention to particular sources and through their comments. Among them I should mention in particular Warren Baum, Aaron Broches, Shirley Boskey, Sven Burmester, Richard Demuth, Johannes Linn, Franz Oppenheimer, Davidson Sommers, Ernest Stern, Wilfried Thalwitz, and Willi Wapenhans, each of whom reviewed some of the chapters of the book. The members of the team currently working on a comprehensive history of the World Bank under the auspices of the Brookings Preface ix Institution took a close interest in my work. I am indebted to John Lewis, Richard Webb, and Devesh Kapur for their suggestions and for sharing with me the insight they had gained on the basis of their much more extensive research into the history of the Bank. I owe a debt of gratitude to those who helped me find and orga- nize the documentary sources. The staff in the Bank's Archives, in particular Charles Ziegler, have given me invaluable assistance by guiding me in my search and responding to my requests with un- failing promptness. Marie Gallup worked with great diligence on the organization of the material and in the process was inspired to prepare a Guide to the World Bank Archives, which was published recently. Paola Brezny copyedited the final draft, and Barbara Malczak and Abigail Tardiff proofread the book. I am grateful to all of them and to the World Bank for its support and the freedom it allowed me to pursue the task I had set for myself. Although the Bank supported me, I am responsible for the conception of the book, the views it reflects, and its conclusions. The book is dedicated to Huda-faithful companion and support- ive colleague through three decades of World Bank history. Introduction June1996 marked the fiftieth anniversaryof the opening for business of the International Bank for Reconstruction and De- velopment (IBRD). The anniversary provides an appropriate occasion to look back and reflect on how the Bank started and how it came to be where it is today. From small beginnings it has grown into a global institution. It has become the World Bank-a nickname that originally reflected aspirations more than accom- plishments. It has become a critical source of finance and advice for developing countries; more generally, it has become a principal intermediary between industrial and developing, rich and poor nations. The past half century has seen major changes in the world economy and in the Bank. Although the era was not free of violent disruptions, there was nothing comparable to the two world wars of the first half of the century. Despite social revolution and a cold war between communist and noncommunist states, on balance the past fifty years were characterized by relatively peaceful evolution. It was a period of spectacular technological and significant economic progress. In particular, it was an era of unprecedented global economic and financial integration-stimulated by technological and economic developments, but also fostered by new international financial and economic organizations, including the 1 2 Bankers with a Mission Bank. These organizations were created to help control and ease tension between nations and to promote trade and economic activ- ity. They came to epitomize a new spirit of international cooperation. When the conference at Bretton Woods drew up the charter of the Bank-its Articles of Agreement-in 1944, World War If was still in progress.' Although the war's outcome could be predicted with some assurance at that time, the shape of the postwar world and its economic problems were matters of conjecture. Indeed, the officials who assembled at Bretton Woods were trying to apply the lessons of the past. They had experienced the collapse of the international economic order in the 1930s and the outbreak of World War II, and they were determined to create institutional safeguards that would prevent another breakdown of trade and financial rela- tions.

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