Rainer Steckhan must have thought someone was playing an April Fool’s joke on him. For the past two years, the young German had served as George Woods’s personal assistant at the World Bank. Woods’s tenure had just ended, and today, April 1, 1968, was the beginning of the new president’s term. Eager to get a head start, Steckhan arrived at the Bank headquarters in downtown Washington early that morning. He had barely sat down at his desk when someone burst into his office. The visitor thrust out his right hand and introduced himself as Robert McNamara, the new president of the World Bank. Steckhan was startled. His old boss had never behaved so informally, and none of the Bank’s senior managers arrived to work this early.1
This was not how Steckhan expected to meet Robert McNamara, of all people. The Bank’s seven hundred professional staff members had been bracing for their new boss’s arrival for months. Since Lyndon Johnson announced the former defense secretary’s appointment to the Bank presidency the previous November, rumors of McNamara’s hard-driving management style, his obsession with numbers, and the prospect that he would shake up the World Bank as he had the Ford Motor Company and the U.S. Department of Defense had circulated throughout the organization.2 Despite McNamara’s reputation, no one was sure exactly what type of leader he would make. Some imagined that he would treat the Bank presidency as a sinecure from which to recover from the Pentagon, biding his time until he could land another job in government or the private sector. Others thought McNamara would use the Bank to continue the fight against communism, winning the allegiance of foreigners through dollars instead of guns. Or maybe McNamara would view the Bank as a means to do penance for Vietnam, promoting development as atonement for the war.3 At the very least, most believed that McNamara’s history would hamper him. Not only was he, at fifty-one, the youngest president in the Bank’s history and the first to come to the organization without a background in finance, but he was one of the primary architects of the Vietnam War, had recently been overseeing one of the largest militaries in human history, and had cut his teeth as an automobile executive.4
Steckhan was pleasantly surprised to find his new boss personally engaging and eager to get to work the morning of April 1. The previous evening, Lyndon Johnson had appeared on U.S. television to announce that he was forgoing his bid for reelection and ordering a partial halt to the bombing of North Vietnam, the very policy McNamara had lobbied for over the past year and a half. McNamara made no mention of the news happening down the street at the White House. Instead, after having Steckhan show him around the spacious presidential office on the twelfth floor of the Bank’s headquarters, McNamara convened the President’s Council, a group of the organization’s senior managers who met every week to advise the Bank president on policy and administrative issues. McNamara used the occasion to dispel some of the concerns management might have had about their new leader. After introducing himself as “a new boy who need[ed] to learn” about the Bank, he listened patiently to their descriptions of the Bank’s work.5 No one dared bring up Vietnam, but McNamara seemed nothing like the anticommunist warmonger or overbearing executive that many made him out to be.6
Nevertheless, McNamara already had some idea of what he wanted to accomplish. Since arriving in Washington in 1961, he had been a strong supporter of international development. Like other Kennedy and Johnson officials, McNamara saw foreign assistance as an important tool in the U.S. strategic arsenal. During his tenure as secretary of defense, for instance, he had argued for increasing U.S. aid to South Asia by stating that “everything we have done in Vietnam won’t count for a thing if Indian democracy goes down the drain.”7 As noted earlier, McNamara’s support for development also had personal roots. As a young man, he told a friend of his intent to “help the largest number.” His managerial background led him to view entire countries as susceptible to rational planning and control. And his upbringing during the Great Depression sensitized him to poverty while imparting in him a belief in the power of government intervention.
Vietnam did not disabuse McNamara of these views. On the contrary, McNamara’s experience during the war strengthened his faith in development. Viewed in the context of his growing doubts about the war, McNamara’s 1966 “essence of security” speech—in which he declared that development was the key to world peace—reflected a change in his view of the type of power that should be deployed to create a better world, rather than in whether such power should be used. McNamara saw the World Bank presidency as an opportunity to continue down a lifelong path of public service, finally freed from the constraints of politics, militarism, and the profit motive.
Nevertheless, McNamara quickly realized that his new position had its own limits. Upon entering office, he was surprised to learn of the Bank’s modest reach in the developing world. William Clark, a former aide to British Prime Minister Anthony Eden who had started working at the Bank at the end of George Woods’s tenure, recalled that McNamara found the Bank’s lending program “small and patchy” compared to the “obvious need.” He was particularly troubled by the fact that the Bank had made “no loans to such critical areas as Indonesia or Egypt, nor to the great majority of the very poorest countries in Africa.”8
McNamara voiced these concerns three days after arriving at the Bank. In a scene that augured the transformation that was about to come over the organization, he reconvened the President’s Council and asked them why the Bank was not lending to more countries. Bank officials responded by highlighting the organization’s political and financial constraints. The Bank was not lending to the nationalist government of Gamal Nasser in Egypt, for instance, because doing so might upset members of the U.S. Congress and thus jeopardize International Development Agency funding. The Bank also avoided operating in sub-Saharan Africa because countries in the region were too poor to quality for the Bank’s regular loans and lacked the capacity to make productive use of IDA funds.9
During the meeting, the sky outside suddenly grew dark. McNamara listened patiently to the President’s Council members and as soon as they were done ordered them to prepare a “list of all the projects or programs that [they] would wish to see the Bank carry out if there were no financial constraints” on the Bank’s ability to lend or the capacity of developing countries to borrow. The group was stunned.10 Although the Bank had expanded its lending under George Woods, management prioritized financial considerations when making lending decisions. Moreover, the organization tended to receive requests for loans rather than seek out lending opportunities. According to one former World Banker, “no one knew how to respond” to McNamara’s unusual request.11 News from outside amplified their shock. As the President’s Council members filed out of the meeting, they learned that the cause of the preternaturally dark sky was smoke from the rioting that followed the assassination of Martin Luther King, Jr.12
The Bank and the world around it were entering a new age.13 As protests raged around the globe, international politics and economics were changing in profound ways. For the Bank, the critical issue was declining support in the West for international development. The relaxation of tensions between the United States and Soviet Union, the gradual end of the postwar economic boom, and disappointment with the results of previous nation-building efforts raised questions about development and contributed to a significant decline in the foreign aid programs of many Western countries. U.S. foreign aid commitments declined from $3.6 billion in 1963 to $3.3 billion in 1968.14 French foreign aid fell from $1 billion in 1962 to $850 million in 1968. And British aid, which averaged $500 million annually between 1964 and 1967, dropped to $430 million in 1968.15
Waning support for development presented a significant challenge to the Bank. Although the Bank did not directly rely on government contributions, a lack of support might place too great a strain on its shoulders or undermine its efforts in other ways. The United States was already dragging its feet in contributing to IDA, and demand for IBRD bonds on Wall Street had begun to decline. Lower foreign aid levels also spelled trouble for developing countries, which needed these funds not just for domestic investment but also to service mounting debt obligations.16 The pressing capital needs of developing countries combined with the growing unpopularity of foreign assistance led observers to speak about a “crisis in aid.”17
In moving from the Pentagon to the World Bank, then, Robert McNamara exchanged one set of global problems for another. Moreover, McNamara recognized that the Bank as he inherited it was incapable of addressing its challenges. Its small lending portfolio was just the tip of the iceberg. The organization’s entire approach was too restrained. If the Bank was to contribute to solving the development problems of the coming years, McNamara felt that it had to change in fundamental ways. The Bank needed to focus more squarely on promoting development, and its capacity for achieving this goal had to be greatly increased.
McNamara outlined his initial objectives as Bank president in a detailed agenda that he drew up for himself shortly after entering office. In characteristically detailed fashion, he listed for himself ninety-eight goals for his first months. These included expanding the Bank’s borrowing and lending programs, recruiting more professional economists to the organization, forging ties with other international organizations, establishing longterm lending targets for each of the Bank’s borrowing countries, and personally monitoring the progress of some of the organization’s development projects.18
McNamara’s agenda demonstrated the hyperactivity that would come to mark his presidency. The man who seemed so thoroughly defeated when he left the Pentagon threw himself into his new work. He divided his long days into tightly scheduled 15-minute blocks and, in a symbol of his desire to rejuvenate himself, jogged up the twelve flights of stairs to his office early each morning. When he was not at the Bank’s headquarters in Washington, the former Ford executive traversed the globe, visiting first world capitals and third world slums in a near constant effort to expand the Bank’s activities. McNamara buttressed his energetic management of the Bank with influential speeches on development issues. In the process, he gained a reputation as a pioneering development thinker outside the Bank at the same time that staff came to know him as a hardnosed boss. Indeed, McNamara’s drive was so great and the scope of his activities so encompassing that at times it seemed that his primary motivation was to keep himself busy.
But McNamara’s leadership represented something else. The goal that occupied the majority of his time and which proved to be his most lasting mark on the Bank was to increase the organization’s size, sophistication, and reach. His own efforts and favorable circumstances allowed him to go a long ways toward increasing the Bank’s power, and within a few years he had turned the organization into the world’s preeminent development institution.
His first task was to increase the Bank’s size. McNamara had managed extremely large organizations at the Ford Motor Company and the U.S. Department of Defense. Now, as president of the World Bank, he found himself in charge of an organization whose total borrowings over the previous year were less than what the United States spent every month in Vietnam. According to one former Bank staffer, McNamara was so disoriented that “at first he kept talking in billions” about the organization’s borrowing and lending programs, then “would correct himself and say, ‘I meant millions.’ ”19
Increasing the Bank’s size meant raising more money. The Bank obtained its funds from a handful of sources, including direct contributions from its members as well as interest payments on its loans. The largest portion, about 34 percent in 1968, came from the sale of its bonds on the private market, and the Bank raised about 40 percent of these funds in the United States.20 While this reflected the dominant role of the United States in the world economy, it also increased the riskiness of the Bank’s portfolio and prevented it from capitalizing on alternate markets. Accordingly, on McNamara’s first day in office he informed his senior staff of his desire to diversity the organization’s borrowings by selling more bonds in other countries.21
Robert Cavanaugh, the Bank’s treasurer, thought that expanding the organization’s borrowings too quickly would jeopardize its credit rating and make it more difficult to borrow at favorable rates.22 Yet the Bank’s bond placements proceeded with a great deal of success, and by the time McNamara delivered his inaugural address at the World Bank and IMF annual meetings in September 1968 he was able to report that over the previous three months the organization had “raised more funds by borrowing than in the whole of any single calendar year in its history.”23
Cavanaugh resigned. In his place, McNamara hired Eugene Rotberg, a young lawyer at the U.S. Securities and Exchange Commission (SEC). Rotberg was only thirty-nine at the time and had no experience in finance or development. Nevertheless, he possessed two key qualities McNamara wanted for the Bank: quantitative proficiency (Rotberg had gained a reputation for sophisticated market analyses during his time at the SEC) and an expansive understanding of development. Rotberg later recalled that when interviewing him McNamara did not seem to mind his inexperience. When McNamara asked whether he had studied finance or economics in college, Rotberg responded that he had majored in history. What did he think about world poverty? Rotberg said it was a problem he would be willing to spend his life trying to solve. And what were his impressions of bankers? Rotberg told McNamara that at the SEC he was trying to throw most of them in jail. In fact, Rotberg’s lack of Wall Street connections seemed to attract McNamara. As he later remembered, McNamara tapped him because he “was not beholden to Wall Street” and would thus have no allegiances beyond the Bank.24
When Rotberg began in November 1968, McNamara instructed him to increase the Bank’s borrowing portfolio in any way he could.25 Rotberg achieved this goal by broadening the range of securities the Bank offered and cultivating investors around the globe, including in the emerging markets of Western Europe, Japan, and the Middle East.26 Rotberg’s success at the Bank earned him praise as “the world’s greatest borrower.” Upon his retirement in 1987, he had raised over a trillion dollars for the organization.27
Although Rotberg managed the specifics, McNamara played a hands-on role in fundraising.28 Whereas Rotberg focused mainly on facilitating the private placement of Bank bonds, McNamara concentrated on lobbying government officials in wealthy countries to increase their contributions to IDA and to purchase more of the organization’s bonds directly. What McNamara lacked in financial experience, he made up for with his energy. Ever eager to increase the Bank’s coffers, at one point he admitted that locating new funding sources made him “very anxious.”29
McNamara’s efforts almost ended before they began. A few weeks after assuming the Bank presidency, he appeared in a television commercial reading a statement supporting Robert Kennedy’s role in the Cuban Missile Crisis.30 Kennedy had recently announced his candidacy for the Democratic nomination for the presidency of the United States, and in order to address concerns about his lack of foreign policy experience had enlisted officials from his brother John’s administration to testify on his behalf.31 Despite McNamara’s denials that he was campaigning for his friend, observers considered the appearance a violation of the rule preventing Bank officials from interfering in the political affairs of the organization’s members.32 The New York Times editorialized that McNamara had “displayed poor judgment and poorer taste” in appearing in the commercial, and Republican senators called on him to resign from the Bank.33 McNamara apologized and escaped further censure, but the affair demonstrated that he remained an intensely polarizing figure even in his new post.
It also complicated the Bank’s efforts to secure U.S. funding for the International Development Agency. Although the United States had been instrumental in creating IDA in 1960, its support for the Bank’s concessional lending affiliate had always been tenuous. As noted earlier, IDA was created as a means to undermine developing country demands for the creation of a UN-managed agency that would issue loans on favorable terms to the world’s poorest countries. By 1964, the United States had reduced its share of IDA from the 45 percent of total funds it provided toward initial capitalization to 42 percent.34 The U.S. desire to reduce its share of IDA funding resurfaced during the IDA II negotiations that began in 1967, as U.S. negotiators balked at George Woods’s proposal for a $2.4 billion replenishment.35 In order to win U.S. support, the Bank’s management agreed to reduce the U.S. contribution to 40 percent of the total.36 Nevertheless, funding legislation stalled in Congress, and as other nations waited for the U.S. to take action before releasing their contributions, IDA began to run out of funds in 1968.37
Although Congress approved the appropriation the following spring, these difficulties strengthened McNamara’s resolve to diversify the Bank’s funding.38 West Germany was one of his main targets. Despite experiencing slower growth than during the “miracle” years of the 1950s, the West German economy continued to grow at an impressive rate in the 1960s, and by the end of the decade the country was running trade surpluses.39 Recognizing that German officials were eager to avoid inflation, McNamara marketed World Bank bonds as a way to invest the country’s excess funds.40 In the summer of 1968, he traveled to Frankfurt to discuss the Bank’s borrowing prospects with West German bankers. He then went to Bonn, where he obtained the permission of Finance Minister Franz Strauss to undertake a series of bond offerings in the country and convinced Karl Schiller, West Germany’s minister of economic affairs, to increase West Germany’s contribution to IDA.41 Later that day, the Bank borrowed 400 million Deutschmarks from a consortium of West German banks. The following month, the Bank sold another $100 million of its bonds in West Germany. This was the largest foreign bond placement in the country’s history and increased the Bank’s annual borrowings in West Germany to $295 million.42 That December, eager to capitalize still further on what one Bank official called the “tremendous pool of capital in Germany which could be put to use for development purposes,” McNamara called on his staff to develop a “yearly borrowing program” for West Germany “covering all lenders.”43
News from the United States tempered McNamara’s excitement. At a meeting in West Germany in June, he learned that an assassin had killed Robert Kennedy while he was campaigning in Los Angeles. After concluding the meeting, McNamara rushed back to Washington. Television reporters stopped him on the sidewalk outside the Bank’s headquarters. As tears streamed down his face, he expressed dismay before ducking into the building. For McNamara, like many others, Bobby’s death triggered memories of his brother John’s murder five years earlier. The assassination was especially difficult for McNamara given his fondness for Bobby, whom he continued to consider a close friend. Bobby was also McNamara’s last tie to the Kennedy administration, and his candidacy remained the best hope that McNamara had of reentering U.S. politics. McNamara had done everything in his power to put the previous years behind him during his first months at the World Bank. The assassination thrust him back into despair. His close friends took note of his moodiness and drinking. His wife, Margaret, voiced concerns about his emotional state.44
Yet McNamara’s personal struggles did not deter him from his mission at the Bank. In the wake of Bobby’s death, he redoubled his efforts to expand the Bank’s funding. In August, the organization raised $42 million in Kuwait in the Bank’s first public bond offering in the Middle East, and the following spring he directed Rotberg to increase the Bank’s non-U.S. bond placements still further.45 To assist with these efforts, McNamara recruited capital markets experts to the Bank and had the organization’s research staff, which spent most of its time studying conditions in developing countries, conduct analyses of borrowing prospects in wealthy countries.46
McNamara also dispatched William Clark, whom he had appointed as the Bank’s head of public relations, to Tokyo to determine the prospects for Bank fundraising in Japan. Japan’s impressive postwar recovery—during the 1960s, the country experienced annual growth rates of over 10 percent—had resulted in its recent “graduation” from Bank borrowing.47 As with West Germany, McNamara considered Japan a potentially lucrative funding source. However, Japanese officials were reluctant to increase their support of the Bank. While the government was looking to expand its foreign aid program, Clark reported that there was “a widespread feeling in Japan that the World Bank was dominated by the United States.”48 Japanese officials reiterated this message to McNamara at the World Bank-IMF annual meetings in Washington a few months later when they indicated that they were planning to channel more of their foreign aid through the Asian Development Bank (ADB), a regional development lender, rather than the World Bank.49
McNamara refused to take “no” for an answer. In a meeting with Japanese Prime Minister Eisaku Sato in Washington, he attempted to assuage concerns about U.S. dominance of the Bank by noting that if Japan increased its contribution it would became one of the organization’s five largest shareholders and, as provided by the Bank’s Articles of Agreement, gain a permanent seat on its Board. McNamara also promised that the Bank would devote more attention to Japan’s regional interests over the coming years. “The World Bank Group would play an increasingly active part in meeting the needs for economic assistance of other countries in Southeast Asia,” McNamara pledged, including “assistance for reconstruction in that region once the war in Vietnam was over.” Although this message might have sounded strange coming from one of the chief architects of the war, McNamara was undaunted. “It was one of the unfortunate consequences of the war in Vietnam that the American people were now less willing than before to accept foreign commitments,” McNamara noted, and this directly threatened the Japanese economy. “Serious debt service problems were confronting countries in southeast Asia, not only in Indonesia, but also in India, Pakistan and Korea,” he warned. “Unless assistance was given to these countries on soft terms it would be difficult for private investors and exporters . . . in Japan . . . to continue to operate in those countries.”50
McNamara’s sales pitch struck a chord. Like their West German counterparts, Japanese officials were eager to invest their country’s surpluses abroad, and they saw Bank bonds as a useful means toward this end. In February 1970, the Bank announced its first borrowings in Japan. That fall, the Bank opened a Tokyo office to, in McNamara’s words, “maintain close contact with the appropriate organs of the Japanese Government, with the Bank of Japan, and with Japanese banks and other financial institutions.” A few months later, the Japanese government purchased $30 million of Bank bonds, and shortly thereafter Japan displaced India as the organization’s fifth largest shareholder. In 1972, the Bank of Japan lent the Bank 100 billion yen, which at the time constituted the largest single borrowing in the Bank’s history.51
In addition to increasing the Bank’s fundraising in Japan and West Germany, McNamara shored up the Bank’s financial position in the United States. Soon after assuming the Bank presidency, he flew to New York to meet with the organization’s underwriters to determine the prospects for future bond placements in the United States. A few months later, he requested permission from U.S. treasury secretary Henry Fowler to undertake a round of borrowings in the country. Aware of mounting concerns about the U.S. balance of payments, McNamara assured Fowler that the Bank would focus on maximizing its non-U.S. borrowings in the years ahead.52 Fowler agreed to McNamara’s request, and in September the Bank sold $250 million of bonds to U.S. investors, a major turnaround given that the Bank had struggled to borrow in the United States over the previous years.53 In order to further solidify private support for the Bank, McNamara gave a speech to the Bond Club of New York in which he sought to assuage concerns about the Bank’s expansion by reaffirming that the organization was “not a philanthropic organization and not a social welfare agency.”54
The Bank continued to enjoy significant fundraising success—both in terms of overall borrowings and in terms of diversification—in the coming years.55 The organization’s borrowings nearly doubled between 1968 and 1971, and by 1974 U.S. investors held less than a quarter of its bonds.56 IDA’s resources also grew more than twelvefold over the course of McNamara’s presidency. As one contemporary observer put it, “non-banker McNamara has demonstrated an uncanny shrewdness and aptitude for the craft.”57
When he was not raising money, McNamara looked for ways to spend it. As with his fundraising drive, this effort compelled McNamara abroad. During his first years, he devoted a significant amount of time to visiting developing countries. McNamara was no stranger to overseas travel. As secretary of defense, he had gone to Vietnam on a regular basis. Although intended to assess conditions on the ground, these trips had been of limited effectiveness. Largely confined to Saigon and a handful of military bases, McNamara rarely spoke with anybody outside the chain of command, a fact that led observers like David Halberstam to conclude that he was unwilling to come to grips with the realities of the war.58
It is not clear what lessons McNamara gleaned from these experiences, but as president of the Bank he expanded his horizons. Accompanied by his wife and a handful of assistants, he not only traveled to many African, Asian, and Latin American countries for the first time but also made a point, then unheard of for a Bank president, to venture outside capital cities to visit urban slums and rural villages. As he noted before a trip to the Ivory Coast in 1969, “learn[ing] . . . about the country” required not just meeting with senior officials but “driving around [and] . . . see[ing] particular development projects” firsthand.59
McNamara’s travels demonstrated his newfound freedom. At the Pentagon, he was subordinate to the president, something his protracted struggle with Lyndon Johnson over U.S. strategy in Vietnam made clear. As the head of the World Bank, however, McNamara not only was able to engage in what he considered a pleasurable line of work—”it beats the hell out of selling automobiles,” he said shortly after entering the Bank—but also was freer to set his agenda.60
But while the Bank liberated McNamara from earlier constraints, his mindset remained similar to that which had marked his time at the Pentagon. In his efforts to turn the Bank into a more global institution, he drew the organization into closer alliance with governments that were pursuing heavy-handed development strategies. While it would be going too far to state that McNamara demonstrated a preference for authoritarian regimes, and while the prevalence of such governments at the time meant that it would have been difficult for the Bank to avoid working with them, McNamara believed that democracy could impede the adoption of policies that he considered necessary for development. For instance, he believed that Japan’s rapid post-World War II development would not have been possible without the U.S. occupation. As he told filmmaker Errol Morris:
Figure 1. Visiting Bengal on a 1976 trip to India. Courtesy of the World Bank Group Archives.
Figure 2. Visiting Calcutta on a 1976 trip to India. Courtesy of the World Bank Group Archives.
Japan, by 1968 when I went to the World Bank, was an example of a country that had been totally devastated by World War II and yet had fantastic development [that] . . . was a function of MacArthur being a proconsul. MacArthur was a dictator and he dictated that Japan should focus on education and agriculture, and he brought some very radical people in.61
The Bank’s relationship with Indonesia is one of the more prominent examples of the way the organization worked with authoritarian regimes during the McNamara era. Although Indonesia joined the Bank in 1954, it left in 1965 having never received a loan.62 The country rejoined the Bank two years later, but by the time McNamara arrived at the Bank in 1968 no new loans had been made.
McNamara found this situation unacceptable. Indonesia was one of the world’s most populous developing countries and had been a geopolitical hotspot since achieving its independence from the Netherlands in the late 1940s. Indonesia had long occupied a central place in McNamara’s thinking, as well. As secretary of defense, he had observed that its “resources, territory . . . and strategic location” made it “the greatest prize of all” in Southeast Asia, and while at the Pentagon he helped develop U.S. policy toward the country during the decisive middle years of the decade.63 In 1964, McNamara lobbied members of Congress to reduce U.S. aid to the nationalist Sukarno government, and under his watch the Department of Defense channeled financial and technical assistance to the Indonesian military, which under the leadership of Suharto deposed Sukarno in a bloody coup in 1966.64
Upon assuming the Bank presidency, McNamara immediately set about accelerating Indonesia’s reentry into the organization. Soon after taking office, he persuaded Bernard Bell, a longtime Bank staffer who had led the organization’s efforts to liberalize the Indian economy in the mid-1960s, to head a new “resident mission” in Jakarta.65 McNamara envisioned the Bank’s Jakarta office, the first of its kind, coordinating the organization’s lending in Indonesia and advising government officials on economic policy. The Indonesian government agreed to the proposal, and in June McNamara flew to Jakarta to finalize the plans.
McNamara found a receptive audience. After meeting with Indonesia’s new economic ministers, many of whom had attended McNamara’s alma mater, the University of California, Berkeley, he sat down with Suharto. The Indonesian president, perhaps seeking to find common ground with a man who until recently had been managing a war against the communist government of North Vietnam, boasted of his efforts to eradicate communism in Indonesia. Before Suharto had a chance to finish, McNamara asked him how his government planned to integrate into the economy the country’s ethnic Chinese, who Suharto had targeted in anticommunist purges that killed over half a million people.66
McNamara was clearly more than the zealous anticommunist Suharto had expected. Yet this was as far as McNamara was willing to push his host. McNamara did not consider the Indonesian government’s abuses a reason to withhold or condition lending to the country. Rather, upon departing from Indonesia, he declared that he was “fully satisfied that the government is following the right lines of policy.”67
Over the coming years, the Bank played a key role in helping to shape Indonesia’s development. Bank funding helped the Suharto regime expand ties with the West and consolidate power.68 The Bank’s relationship with Indonesia also exemplified McNamara’s interest in having the organization play a more active role in policy advising. Although McNamara was keen to increase the Bank’s lending to Indonesia, he saw advising as a more important function. As he explained to Bank officials, the Bank’s “technical assistance and the stamp of approval,” rather than its loans, were unique resources that would be most helpful to the government.69
McNamara received a less friendly welcome during a trip to India a few months later. India was the Bank’s largest borrower, but memories of the organization’s ill-fated campaign to force the government to adopt a package of liberalization measures remained fresh on people’s minds when McNamara visited in November 1968. The Vietnam War was also highly unpopular. Upon his arrival in Calcutta, McNamara was greeted by protests so large that he had to flee the city by helicopter.70
McNamara had become accustomed to criticism, however, and the event had little impact on him. Over the coming years, he continued to spend considerable time in developing countries, some of which had only recently gained independence and become members of the Bank. As a result, his reputation began to change. Whereas many had been skeptical of the former defense secretary’s appointment to the Bank, his travels to the Bank’s borrowing nations demonstrated his commitment to international development and seemed to mark a break with his controversial past. McNamara tended to impress his hosts with his knowledge of their country’s economic conditions and his promises to deliver more loans.71 As William Clark, who often accompanied him on these trips, put it, developing country leaders were “delighted to discover that McNamara is human.”72 While much of the praise was ceremonial, developing country leaders appear to have been sincere in their approval. For example, Senegalese President Leopold Senghor took time out from a White House meeting with Richard Nixon to declare that he considered McNamara “a friend,” and in 1972 developing countries unanimously supported his appointment to a second five-year term as Bank president.73
McNamara’s travels signified a tremendous expansion in Bank lending. McNamara was determined to increase the organization’s development operations. Specifically, he wanted to direct more funds to poorer countries and to finance new types of projects. To this effect, in his inaugural address at the World Bank-International Monetary Fund annual meetings in September 1968, he announced his desire to multiply the amount of overall Bank lending, to direct more IBRD loans and IDA credits to countries in Africa and Latin America, and to have the Bank increase its support for agriculture and education projects.74 Under McNamara, the Bank met these goals. IBRD loan commitments increased from $847 million in 1968 to $8.8 billion in 1981, while IDA credit commitments grew from $107 million to $3.5 billion during the time. The composition of Bank lending also changed. In McNamara’s first five years, the organization directed twice the amount of funds for agriculture, three times the amount for telecommunications, and four times the amount for education than it had lent to each of these sectors in the Bank’s entire history. All the while, the organization continued to provide significant support for transportation and energy projects.75
Although McNamara was the primary impetus, the Bank’s expansion also dovetailed with changes in U.S. foreign policy. In the late 1960s, budgetary pressures convinced American officials to channel an increasing share of U.S. foreign assistance through multilateral channels.76 Whereas 3 percent of U.S. foreign assistance was channeled through international organizations from 1964 to 1966, in 1974 over one quarter of U.S. foreign aid went to such institutions.77 The United States was not alone in making this move. From 1963 to 1973, developed countries as a whole doubled the percentage of foreign aid that they channeled through international bodies like the Bank.78
McNamara saw this trend as a welcome recognition that international organizations were ready to take the lead in providing foreign aid. He also correctly diagnosed it as an attempt by certain countries to reduce their aid budgets. Accordingly, he felt that it was vital that the Bank increase its assistance to fill the emerging financing gap at the same time that it encouraged wealthy countries to maintain their foreign aid levels. “At a time when the flow of capital aid is lessening, and the dangerous gap between the rich countries and the poor is growing, it is essential that the World Bank expand its lending activities to prevent the development effort from grinding to a halt,” he told senior Bank officials in the summer of 1968.79 “By taking a lead in development assistance,” he continued, “we may encourage all those, rich and poor alike, who have begun to lose heart and slacken their pace.”80
In order to handle the Bank’s heavier workload, McNamara increased the size of the Bank’s staff by expanding recruitment efforts and increasing salaries.81 These moves yielded immediate results. In McNamara’s first year, the Bank’s staff grew from 767 to 961, and by 1976 the organization was employing over 2,000 professionals.82 McNamara’s hiring drive had long-lasting effects on the Bank. In addition to causing the organization to become larger and more bureaucratic, it made the Bank more international. In 1968, the vast majority of staff came from the United States and Western Europe.83 McNamara wanted the Bank to be a global institution. Accordingly, he stepped up efforts to hire developing country nationals. As with his general recruitment efforts, this move was highly successful: in 1973, the organization employed people from 92 different countries.84 Perhaps most importantly, McNamara’s hiring drive entrenched economics as the Bank’s main discipline. Reflecting its focus on infrastructure, in the Bank’s early years its staff was dominated by engineers. McNamara, who studied economics in college, viewed economic analysis and policy advising as central to the Bank’s work, however, tasks to which professionally trained economists were most suited. As a result, staff hired during his tenure were mostly economics graduates from American and European universities.85
In addition to recruiting more staff, McNamara improved the Bank’s research program. His goal was to increase the effectiveness of the Bank’s operations while burnishing the organization’s reputation. McNamara’s most important move in this regard was enlisting Hollis Chenery to become the Bank’s chief economist. Chenery, a professor of economics at Harvard, had served as an official at USAID in the 1960s. He had achieved prominence for developing a model that attempted to quantify the amount of external assistance a country needed in order to sustain a given level of economic growth, and when he came to the Bank in 1970 he was considered one of world’s foremost development economists.86 Chenery sought to improve the Bank’s research program in two ways. First, he divided the organization’s research staff into three separate branches focusing on basic development topics, project-specific issues, and macroeconomic analyses of developing country economies. Second, he recruited economists directly from the world’s top graduate programs. Taken together, these efforts enabled Chenery to construct a world-class development economics research program.87 As one economist noted in 1979, “it is common knowledge that most of the best people in development are at the World Bank.”88
It had become clear well before then that McNamara’s efforts to turn the Bank into a more powerful organization had borne fruit. The expansion of the Bank’s borrowing and lending portfolios demonstrated that the organization was moving from the margins to the center of the international development field. Yet McNamara focused on more than simply increasing the Bank’s size. In his first years at the Bank, he also sought to alter the structure of power within the organization. Specifically, he attempted to consolidate authority in World Bank presidency by instituting quantitative planning systems and reducing the ability of member governments to supervise Bank management.
When McNamara arrived at the Bank in April 1968, he was displeased to discover that the organization had no central accounting system in place.89 The Bank did not make sophisticated projections about its future operations or maintain detailed records about its work. Moreover, the information that did exist was not standardized across departments.90 McNamara complained to his aides that Bank data was so indecipherable that it resembled license plate numbers, a telling critique given that the situation that confronted him was akin to that which he encountered at the Ford Motor Company in the 1940s.
McNamara attempted to improve the Bank’s accounting in a way similar to that which he implemented at Ford. During his first days as president, he ordered the Bank’s senior managers to compile detailed reports on the organization’s activities. McNamara specified both the content and form of this data. The information allowed him to populate charts detailing the Bank’s historical borrowings in different markets, as well as its lending operations and disbursement rates broken down by country, sector, loan size, and maturity for each of the previous five years and aggregate five-year periods before that.91
According to John Blaxall, the staffer in charge of collecting information from the Bank’s departments and transferring it to McNamara, the aging Whiz Kid used these “standard tables” to gain an understanding of the Bank as it presently existed and to determine how to lead the organization going forward. “What others saw as simply a sheet full of numbers,” Blaxall remembers, McNamara “saw as data corresponding to categories he had himself thought about and specified.”92 To those less charitably inclined, including Bank staff who were encouraged by their supervisors to estimate figures when precise data was unavailable, this process also indicated McNamara’s tendency to manipulate data by interpreting approximations as fact. “He was always after statistics he couldn’t get,” one former Bank staffer recalled. Some of it “was just make-believe . . . like body counts.”93
Once McNamara had developed his first set of standard tables, he ordered the Bank’s senior managers to draw up detailed plans for their departments for each of the coming five years.94 McNamara had raised the possibility of long-term planning on his first day in office, and since the fateful April 4 President’s Council meeting Bank staff had been busy compiling an expanded list of projects to meet this directive.95 Belying the rationality McNamara sought to institute, staff assembled the reports in a haphazard fashion, in some cases using discarded project proposals.96
The lists that finally made their way to McNamara’s office a few months later added up to a doubling of Bank lending over the coming five years, including large increases in lending to Africa and Latin America as well as for agriculture and education projects. These proposals formed the basis for the Bank’s first five-year plan, which McNamara unveiled at the World Bank-IMF annual meetings in September 1968.
Although these proposals formed the basis for the Bank’s expanded lending program, their greatest effect was felt inside the organization. By forcing staff to begin systematically detailing the Bank’s activities, McNamara transformed the organization’s basic approach. Whereas the Bank had tended to receive and process loan applications on a case-by-case basis, staff now found themselves formulating lending proposals on their own, devoid of significant input from borrowers and designed to meet predetermined lending targets. In this way, McNamara’s five-year plan inaugurated a period in which quantitative programming replaced the more qualitative, ad hoc style that had long characterized the Bank’s lending operations.97 “Up to that time, the Bank’s approach to lending had been to wait until an opportunity arose,” one former World Banker explained. “You wouldn’t be pushing, because you were a banker. You would be waiting for your clients to come and say, ‘I want to borrow money.’ You certainly wouldn’t have a huge plan for the country.”98
These new planning systems also increased McNamara’s control over the Bank. Most managers would have shared the information, if for no other reason than to increase transparency within the organization. But McNamara kept the data confidential.99 He made only simplified versions of the standard tables available to the Bank’s senior managers and mandated that staff not share information with government officials.100
Not surprisingly, many in the Bank bristled at McNamara’s directives.101 Some staff viewed development banking as a qualitative endeavor incapable of being reduced to McNamara’s metrics. Bank staff also argued that setting lending targets would reduce the Bank’s leverage insofar as it restricted the organization’s ability to increase or decrease lending depending on the behavior of borrowing governments.102 Resistance was so strong that some Bank managers continued to direct their departments to operate in the same manner as before.103
McNamara had encountered an entrenched bureaucracy seven years earlier, when his efforts to reform the Department of Defense met stiff opposition from the military brass. McNamara had responded by creating a Planning, Programming, and Budgeting System (PPBS), which subjected Pentagon operations to long range planning and analysis. PPBS allowed McNamara to increase his oversight of military spending—the true center of power within the Department—and tame the generals.104 The results were so impressive that in 1965 Lyndon Johnson ordered all federal agencies to adopt PPBS-like systems.105 At the Bank, McNamara created a Programming and Budgeting Department (P&B) to govern the allocation of resources within the organization. Because P&B reported directly to McNamara, this innovation further increased his control over the Bank.106 Through such methods, McNamara overcame internal opposition to his proposals and, in the words of a former staffer, “forced the institution into a planning perspective over its own inhibitions.”107
One of McNamara’s most important initiatives was the creation in 1969 of the Country Program Paper (CPP), a document that appraised economic conditions in and prescribed lending programs for each of the Bank’s developing country members.108 Drafted by the Bank’s regional departments and made to conform to the organization’s lending targets, the CPP systematized the Bank’s longstanding efforts to advise developing countries on economic policy matters and further entrenched quantitative programming into the Bank’s operations.109
Because it was used as a basis for the Bank’s lending decisions, the CPP was a prime example of the way McNamara’s reforms of the Bank’s internal procedures overlapped with his efforts to increase the organization’s control over its member countries. McNamara’s first move in this direction was to reduce the power of the Bank’s Board of Executive Directors, the representatives of the organization’s members who formally approved each one of the Bank’s loans. Just one week into his tenure, McNamara directed the Bank’s senior managers to lobby executive directors on issues before they came up for a vote.110 McNamara also refused to allow executive directors to see reports from the Bank’s staff and placed strict limits on discussion of loan decisions during Board meetings.111
McNamara justified these moves on both efficiency and equity grounds. He believed that the executive directors were largely incapable of understanding the complexity of the Bank’s operations and that fully informing them would drain staff resources. McNamara also recognized that the directors represented their national interests. As he told the President’s Council in 1972, “the Board could not be allowed to decide on country lending programs, since it would make such decisions on entirely political grounds.”112 Allowing the Board to be involved in decision-making could thus lead to interstate conflict and tarnish the Bank’s apolitical image. McNamara’s preference for centralized decision-making—while at the Pentagon he had stated “the more important the issue the fewer people should be involved”—also accounted for his desire to reduce Board power.113
McNamara used his authority to chair the Board’s weekly meetings to reduce the time spent discussing specific loans. When combined with the tremendous expansion of the Bank’s lending, this eliminated the ability of executive directors to have a meaningful say in Bank operations.114 At the same time, McNamara continued to direct his aides to lobby executive directors, which enabled him to forge consensus behind the scenes.115 He also discouraged executive directors from meeting in other venues, and he kept schedules of the Board’s agenda secret until the last minute.116 Executive directors occasionally protested these efforts. For instance, in 1972 the U.S. representative to the Bank expressed “dissatisf[action] with the lack of discussion of the Bank lending program” among the Board.117 However, the Board soon succumbed to McNamara. “The Board members’ feelings,” a former Bank staffer remembered, “were that they were steamrolled regularly by McNamara but that they were part of an increasingly important organization. In the end there was an accommodation, an adjustment to McNamara’s style.”118
In addition to reducing the power of the Board, McNamara sought to influence government officials directly. Besides hiring lobbyists to help secure passage of Bank funding bills in the U.S. Congress, he directed the Bank to begin lobbying the foreign offices of wealthy nations, in addition to their finance ministries and central banks.119 He also tasked William Clark, the Bank’s external relations chief, with improving the organization’s public relations efforts.120
A tension lay at the heart of these efforts. McNamara prized the Bank’s independence. Yet he also wanted the organization to expand. As such, he needed the financial support of developed countries. This tension would bedevil McNamara throughout his presidency. During his initial years, however, it led to one of the more salutary developments of his tenure, the creation of the Bank’s operations evaluation department.
Prior to McNamara’s arrival, the Bank did not systematically evaluate the effects of its operations.121 Aware of this deficiency, McNamara listed the creation of an evaluation department on his initial ninety-eight point agenda.122 McNamara failed to take any significant steps toward this end during his first year and a half in office, however.123 Then, in December 1969, McNamara became aware that, in conjunction with the upcoming IDA III replenishment, Congress was considering having the General Accounting Office (GAO) investigate Bank operations.124 McNamara saw this as a significant threat to the Bank’s independence—a GAO audit would, he later said, “jeopardiz[e] the Bank’s integrity”—and was, as such, worthy of a swift response.125 He informed his senior aides that “immediate action” to improve the organization’s own evaluation mechanisms was needed to blunt congressional inquiry, and, to this end, directed members of the President’s Council to initiate a “pilot project” that would review completed Bank projects.126 This mandate resulted in the creation of the Operations Evaluation Unit (OEU), which McNamara established in September 1970, just in time for him to boast to U.S. treasury secretary David Kennedy of the strides the Bank was making in evaluating its effectiveness.127
The OEU’s initial work was limited. It employed only five full-time staff members and in its early years issued just two reports: an analysis of the Bank’s twenty-year experience in Colombia and a summary of its efforts in the electric power field.128 In the meantime, the GAO went ahead and published a report on the Bank.129 While Burke Knapp, the Bank’s longtime head of operations, found the report “comparatively harmless,” McNamara remained “disturbed” by the notion that outsiders could gain information on the organization, and in order to blunt further inquiries called for more improvements in the Bank’s evaluation mechanisms. As he told his senior aides in April 1972 “the increased interest on the part of governments was another reason for particular focus on Bank . . . supervision and operations evaluation.”130 With progress slow, a year later McNamara informed the President’s Council that “more thought had to be given to how the Bank’s evaluation activity should be organized in response to pressures from the outside,” and shortly thereafter he issued a directive mandating that audits be conducted on all the Bank’s loans.131 In order to increase its impartiality, McNamara also decided to place the Bank’s evaluation unit under the direction of a vice president with no operational responsibilities. On July 1, 1972, the Bank established an Operations Evaluation Department (OED) that reported directly to the Board.132
At the same time that he was seeking to curb outside interest in the Bank, McNamara positioned the organization to play a more active role in the affairs of its borrowers. After returning from his trip to Indonesia, McNamara informed the President’s Council of his desire to establish Bank offices throughout the developing world. By 1970, the Bank had set up “resident missions” in Afghanistan, Ethiopia, Kenya, India, Indonesia, the Ivory Coast, Nigeria, and Pakistan.133 The founding of these offices demonstrated the expansion of the Bank’s lending program and exemplified the Bank’s interest in dispensing policy advice as well as loans. As McNamara told Kofi Abrefa Busia, prime minister of Ghana, the Bank’s resident missions were to engage in “constant dialogue” with host governments “in the area of economic planning and decision making.”134
Similar concerns motivated the expansion of the Bank’s “country mission” program.135 McNamara systematized the Bank’s longstanding practice of sending staff from the organization’s headquarters to developing countries for short periods in order to collect information on the economy and make policy recommendations to government officials. To McNamara, a program of regular country missions would “provide the World Bank Group, other international institutions, government and intergovernmental agencies with a thorough knowledge and analytical assessment of the development problems and policies of individual member countries,” as well as establish “a basis for discussions with the country concerned on its development policies and plans.”136
In addition to expanding ties with developed and developing countries, McNamara brought the Bank into alliance with other international organizations. In his initial agenda, McNamara indicated his desire to “develop a plan to use the UN agencies . . . as separate arms of a unified development strategy,” and during his first years as Bank president he built upon George Woods’s efforts to forge ties with other international organizations.137 In the early 1970s the Bank entered into partnerships with the World Health Organization (WHO) for population control and family planning programs, the International Labour Organization (ILO) for analysis of international employment issues, and the UN Industrial Development Organization (UNIDO) for the financing of industrial projects in developing countries.138
Not all these efforts went smoothly. A little over a month after taking office, McNamara dispatched Richard Demuth, director of the Bank’s International Relations Department, to confer with officials at UNDP about the possibility of intensifying contacts between the two organizations. Demuth convinced UNDP Director Paul Hoffman to channel some of his organization’s funds to the Bank’s new resident mission in Indonesia. At the same time, however, Hoffman complained that the Bank was, through the resident mission as well as similar activities in other countries, trying to displace the UNDP from its traditional role in drafting investment plans for developing countries.139 Hoffman was right to be concerned. As noted above, one of McNamara’s initial moves as Bank president was to have the organization increase its country programming activities, which included the types of preinvestment studies conducted by the UNDP.140 Although Hoffman argued that the Bank was infringing on UNDP territory, he was unable to do anything about it.141 Instead, in 1970 the UNDP began seconding members of its staff to Bank missions.142 Under pressure from other specialized agencies, the UNDP also dropped its plans to begin its own country mission program, declaring that it would henceforth “leave country performances to be judged by agencies such as the Bank.”143 While relations between the two organizations remained frayed over the years, the fact that the Bank’s resources dwarfed those of the UNDP meant that the latter’s complaints never amounted to much.144 As one Zambian official put it at the time, “the rivalry between the UNDP and the Bank . . . isn’t serious because the Bank’s annual profits equal the entire UN budget.”145
The Bank’s ability to forge ties with and assume roles traditionally undertaken by other agencies demonstrated its growing power in the international development field. Partially because of McNamara’s fundraising efforts, governments channeled an increasing share of their foreign aid through the Bank. By the end of McNamara’s first five-year term as president, for instance, over 60 percent of all aid commitments made by international organizations to developing countries came from the Bank, up from 50 percent in 1968.146 The financial dominance of the Bank forced bilateral and multilateral agencies to, in the words of an Ivory Coast official, “accept the Bank’s leadership role” in development activities.147 “Other international organizations are so insignificant that they couldn’t compare with the Bank’s operations,” a Jamaican official noted.148
Significant problems accompanied the Bank’s growth. The scale and pace of the organization’s expansion strained an institution that had long operated in a conservative fashion. Longtime Bank staff struggled to adapt to the new workload, and within a few years the organization began to have trouble processing and supervising its loans. This resulted in a phenomenon known as “bunching,” in which a large percentage of the Bank’s loans were processed in haste at the end of a reporting period in order to meet lending targets. In the spring of 1970, McNamara noted that the Bank’s staff was struggling to adjust to their “unprecedented operational load.” That fall senior Bank staff expressed concern at the number of projects to be presented to the Board in the last quarter of the upcoming fiscal year. And the executive directors began to worry about their ability to monitor the organization’s lending. By 1972, a significant share of the organization’s projects were, in the words of a senior Bank official, “immature or ‘non-starters,’ ” with 45 percent of projects proposed during the 1973 fiscal year having “low probability of materializing in that year, mainly for reasons of insufficient preparation and doubts about their justification.”149
Not surprisingly, such issues negatively affected morale. Staff raised complaints that McNamara’s “programming and budgeting exercises” had “place[d] undue emphasis on speed and performance in completing programs.”150 There were also worries about bureaucracy. In a rare meeting with mid-level staff in 1972, McNamara noted widespread dissatisfaction with “increased paperwork and large meetings.”151 “There is a morale problem,” a longtime Bank staffer who had recently returned to the organization’s headquarters from the field noted in 1970. “So many people are working under such pressure that the motivation which used to make us all work hard in good spirit (our sense of mission) has taken a big dip.”152 As one Bank official put it, the Bank had “reached a size and level of complexity at which it [could] no longer rely on the network of personal relationships among senior staff that enabled coordination to be achieved in the past.”153
McNamara was conscious of these problems and gradually restructured the Bank in order to help cope with its increased workload. In the fall of 1968, he divided the Bank’s Central Projects Department into specialized units dealing with agriculture, education, public utilities, and transportation, created departments for tourism, population, and special projects to oversee the organization’s entry into these fields, and split the Africa and Asia Departments into departments for Western Africa, Eastern Africa, South Asia, and East Asia and the Pacific.154
These moves did not solve the problems that accompanied the Bank’s growth. As a result, in 1972 McNamara hired the consulting firm McKinsey & Company to help him execute a Bank-wide reorganization.155 The reorganization centered on replacing the Bank’s longstanding division between Project and Area Departments with five regional departments, which would each contain their own project divisions.156 McNamara carried out the 1972 reorganization with the speed and secrecy that had come to characterize his presidency. He kept the details of the reorganization confidential and, once he released them to staff, ordered that change take place over a single weekend.
The reorganization allowed McNamara to further his goal of getting the Bank to focus on country programming.157 Whereas before 1972, the Projects Department established common standards across the Bank, following the reorganization project staff were placed under managers with a geographical focus. “The effect,” the Bank’s historians have explained, “was to increase the weight of countrywide lending criteria as against the specialized technical criteria of project staff. This change complemented the already established CPP system, and together they opened doors to the introduction of new lending considerations” tied more to countrywide conditions than those relating to specific projects.158 McNamara justified the reorganization to the President’s Council by claiming that it would enable “closer identification” between the Bank and its borrowers.159
Many Bank staff were unsure about the elevation of country programming. “There was a general aura that these program people were in a different world,” remembers a former Bank staffer, since program-oriented staff members focused on entire countries and were “divorced from the more daily, pragmatic, on the ground” experiences of project staff.160 World Bankers also expressed concerns about McNamara’s personal control over the Bank, his obsession with quantifying development, and his intolerance of ambiguity. “McNamara didn’t like anybody to admit that they didn’t know absolutely everything that was going on,” a former Bank staffer recalls.161 “People almost trembled going in to see him,” another remembers. “If you didn’t have the answers, you could get decimated.”162
These complaints were well founded. In his first years at the Bank, McNamara exacerbated tendencies that, though long present at the organization, would plague it over the coming years. While the Bank had long operated in an opaque manner, McNamara’s centralization of power in his office not only failed to deter outside interest but, as we will see, also contributed to the organization’s difficulty in retaining U.S. financial support. More importantly, McNamara’s drive to increase the volume of Bank lending outstripped the organization’s capacity to supervise its operations. Thus, just one year after the 1972 reorganization, members of the President’s Council noted that the “continual pressure for more lending” had resulted in a “desperate scramble” to process loans.163 Meanwhile, some observers began to worry that the organization had become more willing to “accept . . . questionable projects.”164
All of this took its toll on staff. A Guyanese official noted that the “increased work load has imposed a strain on Bank people. Everyone works harder and longer hours.”165 Another observer noted that McNamara’s imposition of quantitative lending targets and his willingness to promote favored junior staffers to senior positions “demoralized” many of the Bank’s longtime workers.166 “The Bank bureaucracy frightens me,” an Indian official declared. “Younger, quantitative-managerial types are rising to important positions. People without experience with their bag of tricks from Harvard are looking for mathematical proofs of social projects.”167
Nevertheless, to McNamara these issues were an inevitable, and not necessarily negative, byproduct of growth. Whether measured by the size of its lending portfolio, the breadth of its research, or the frequency with which it enlisted other organizations in its efforts, McNamara’s active leadership pushed the Bank into a dominant position in the international development field. McNamara had turned the World Bank into a more powerful institution. Now the question became what to do with it.
