106431 WORLD BANK HISTORY PROJECT Brookings Institution Transcript of interview with ARTURO ISRAEL Date: undated, ca. 1994 Washington, D.C. By: John Lewis, Devesh Kapur 1 FOREWORD The following is a transcript of an oral interview conducted by the authors of the World Bank’s fiftieth anniversary history: John P. Lewis, Richard Webb and Devesh Kapur, The World Bank: Its First Half Century, Washington, DC: Brookings Institution Press, 1997. It is not a formal oral history, and it is not a systematic overview of the work of the person interviewed. At times the authors discussed the planned publication itself and the sources that should be consulted; at other times they talked about persons and publications extraneous to the Bank. Some interview tapes and transcripts begin and end abruptly. Nevertheless, the World Bank Group Archives believes that this transcript may be of interest to researchers and makes it available for public use. Arturo Israel No date, ca. 1994 - Verbatim 2 [Begin Tape 1, Side A] LEWIS: . . particularly we’d like to talk about institutional things. I think almost anybody in his right mind knows that institutional aspects of development are very important. But the Bank has, it sometimes it appears from the outside—people sort of caricature it that it has been in the hands of either engineers or economists, and so it has been not as sensitized perhaps to institutional issues as it might have done. ISRAEL: That’s right. That’s right. LEWIS: So I’d love to hear you sort of from your perspective tell how the awareness of institutional problems evolved. ISRAEL: It’s difficult to summarize easily, but you can, you know, as a caricature one can begin by saying that the first visceral reaction of the Bank on institutional issues was to avoid them. When we were financing highways and dams and all of that, those had to be financed in the context of the institutional setup of the countries. And the solution that the Bank followed for quite a long time and way beyond when it was clear it was damaging to the countries was to create institutional enclaves where you would have typically a Bank’s project unit in charge of implementing the Bank-financed project and that project unit was isolated from the vagaries of the problems in the country, of the institutional setup in the country. Not only that, it took away from those institutions the best and the brightest to work for its project, paying them more and giving them more benefits and perks. And the consequence of that was very clear after a while, that first of all the original institution was left much weakened. Very little effort was made to link the project unit back into the line agency. And then these characters that were lured to go to the project unit didn’t want to go back to the main agency; they moved on to the private sector or they were hired by the World Bank or by the United Nations, so they disappeared. Now you cannot say that that was—who knows what’s the net effect of that on a global perspective, but the fact is that the line agency was left worse off. Sometimes—and this is something that at present it might not be a bad idea, especially in the ex- Soviet Union—sometimes the existing line agencies are so awful that that’s a legitimate strategy to consciously destroy them and rebuild a line agency around a project unit. But then the Bank—that was feasible while you were doing very specific projects, the highways, the ports, the railways, the industrial part--then think, and especially after your period, after 1971, things got more complicated. One, we got involved in other sectors where the institutions were even weaker than in the harder sectors, because at the outset we were dealing with harder sectors (infrastructure, the ones that I described before). And when we got into agriculture and the social sectors, we got into health agencies, agricultural extension, education, which in general are weaker institutions from all points of view. They are soft sectors. And there the nature of the projects themselves made it more and more difficult to isolate them from those institutions. If, for example, you have a project on agricultural extension. Well, the bloody project is to run the agricultural extension. The investments are incidental; I mean the money for investments is incidental. And then education projects—although it should be like that; we’ve tried desperately to deal only with the buildings and the teaching materials but not with the running the Arturo Israel No date, ca. 1994 - Verbatim 3 educational services which is what we had to do at the outset. So it became less and less easy to avoid the institutional issues. So then we got more into that. And simultaneously--I would say historically--that coincided with a period in which it was becoming clear that the enclaves in the traditional projects were no good so we started more seriously to have long term relationships for institutional strengthening of some of this. LEWIS: The dates on this sort of thing you’ve been talking about would be in the ‘70s? ISRAEL: The ‘70s, the ‘70s, you know the [Robert S.] McNamara—you know, the speech and expanding of the remit of the Bank intellectually and, you know, parallelly in development theories, you know, the strategies that they developed. So we got into institutional issues, but very haphazardly, in part by experts in other disciplines. It was the highway engineers and the architects and the financial analysts that began to feel with institutional development, either by directly giving advice or then--the more enlightened ones would know that they didn’t know and would hire people with some expertise but they would manage them and they would vet and monitor what they were doing. So the results have been, if you look at the results of that period, were also haphazard, much less favorable than the results on direct investments. You know, I have a particular view on that. I can give you some material which . . LEWIS: We’d love to have it. ISRAEL: . . why the patterns; you know there are sectoral patterns and regional patterns. You can get into that; that’s more complicated. But what we were doing was haphazard in more than one way. It was haphazard because of the people were managing institutional aspects, and it was haphazard became different approaches and levels of interest were devoted to this, and some people were at the state of the art level and others were very much fifty years before. And also what was done in particular operations was also haphazard. At one extreme you did have enlightened operators that thought that what the Bank will really leave was those institutions that will make the country self-propelled and undertake development programs on their own and put a lot of emphasis on institutional strengthening, all the way to people that say, “I don’t give a damn about institutional strengthening. I’m interested in my project’s disbursements, and I will do with institutions only the minimum necessary to maximize my disbursements.” And people say that now. I’ve heard that said a few months ago, not twenty years ago. So that’s still . . KAPUR: Are there any good examples of the former, of some really good institution building? ISRAEL: Yeah, there are many, many. It’s hard to--for example, the whole program on the training and visit in agricultural extension is a classical institutional development program that began fifteen years ago, controversial, et cetera, but by and large very positive. We have had long-term relationships with a number of, for example, utilities, in many countries, and highway Arturo Israel No date, ca. 1994 - Verbatim 4 agencies and finance companies in India, some of the—what’s the name of that ICICI [Industrial Credit and Investment Corporation of India] . . KAPUR: DFCs [development finance companies]. ISRAEL: DFCS. The Indian railways. The power companies in Mexico, in Thailand, the irrigation authorities in several countries. We can go through a fairly large list of--even in Ethiopia, highways and telecommunications that continued even during the civil war and the revolution and all of that. And so you do have a number of success, but when reviews have been made, more broader reviews through OED [Operations Evaluation Department], it always comes up that progress in institutional development programs is much less than in investments. And that to a certain extent is something that ought to be expected because it’s a much more difficult activity. I mean, it’s much more difficult to strengthen a particular institution than to build a road. LEWIS: I don’t want to interrupt you, but one could make—I’ve heard it made, maybe I made it myself—the case that the Bank, which has a higher average IQ than about any other agency operating in the field as an external intervenor, has not had a great track record as an innovator institution. I know India case best. But there you look for institutional innovators the Ford Foundation, Management Institute, AID [United States Agency for International Development] I used to be with, we were very proud of what we had done with agricultural universities. I must say this comment does not include the kind of infrastructure things that you say the Bank was working in. But in the soft sectors it doesn’t look like it’s been such a successful innovator, and when it got sort of left alone as leading the pack in Africa, it didn’t know what to do. ISRAEL: Yes, that’s absolutely true. You see, I don’t think that the Bank has given institutional issues the importance it deserves and the resources and the incentives. And the organization is too heavy and big to be an innovator in the soft sectors where you have to act in a more decentralized way, be less concerned about immediate results or disbursements or be less concerned about disbursements, period. You have to be very close to the ground. The closer you get to the social sectors the more specific and closer to the ground the whole thing becomes. KAPUR: Slow down. Picking up on John’s point, one of the things which sort of one sees as the Bank over the decades, especially the last two decades, moved away from the hard sectors to the softer sectors, one raises, one of the things you raise in your book on the specificity to the activity. The hard sectors are more specific, you can define it better [inaudible] get into. But people argue that the Bank itself has no comparative advantage by its very own organizational structure. One, it is a very centralized institution. You have to be far more decentralized, to be much nearer on the ground, as you say. So its own organizational structure precludes or inhibits it doing well in institution building. Second is that the unit costs of institution building, which are very sort of human intensive, given the fantastic salary differentials, the Bank’s own salaries, et cetera, mean that this can become a very expensive activity. Again, the Bank wouldn’t have that comparative advantage. And the third is the way the Bank has this wail of how it deals with politics and corruption. Institutions are intrinsically—what goes on in the institution is also politics and politicking. That doesn’t exclude the Bank, also, but by saying that, “Look, we are Arturo Israel No date, ca. 1994 - Verbatim 5 above or beyond politics, we don’t—you know, corruption is an issue, obviously, there, but we don’t”--it has in a sense tied its hands. ISRAEL: Yeah, well, those are spurious arguments, I think. The first one, surely the Bank is not really well organized for doing institutional development, but the Bank’s organization is not chiseled in granite. There’s no reason why the Bank couldn’t organize part of it. And it’s constantly reorganizing, so they might as well do something if they were to give this priority. The last point is a tricky one, because if we get to the conclusion that the Bank cannot do institutional development, that’s tantamount to saying that it cannot do development work unless the Bank becomes a development agency that is completely responsible. Another way of looking at it, if this place were to be a private bank trying to channel 24 billion a year and we were interested only in making sure that the projects are not totally stupid and that we have a good collateral, you can do that with five hundred people, with one-tenth of the staff. De facto, most of the Bank’s brainpower is dealing with policy and institutional issues, otherwise we wouldn’t have such a large staff. The tragedy is that that’s not recognized and it’s not staffed and managed well because the whole internal incentive system is against that. There is implicitly an agreement and acknowledgement that a large proportion of the Bank’s staff ought to go to institutional and policy issues. Otherwise it would be very easy, along the lines that I said. But the incentive system, specifically by having a lending program, in the end indicates that the staff, you know being human beings, will try to maximize, to have their lending program, and minimize the amount of institutional and policy work that is necessary to do that. To solve that really you would have to eliminate the lending program and define targets in a different way about quality and really long term in-depth impact. LEWIS: You say eliminate the lending program—have the Bank no longer be a transfer institution? ISRAEL: No, you transfer what you can. LEWIS: But you don’t set yourself targets. ISRAEL: Exactly. You say this is a development agency, and to do development you have to do policy work, institutional work, and transfer financial resources. In those cases where those packages are reasonable we will transfer the resources; if not, not. KAPUR: How would you see this link with the Bank’s work on technical assistance? ISRAEL: Well, most technical assistance is institutional development. KAPUR: Right, and the Bank’s own analysts—from what I’ve read--are not particularly optimistic on what it has done. ISRAEL: Well, how could they, because they have been dealing on institutional issues and they have failed in probably around two-thirds of the cases. Arturo Israel No date, ca. 1994 - Verbatim 6 But you see the Bank is still—I am an economist—but the Bank is still too much an institution that is guided by things that can be clearly quantified. And it’s in the hands of financial economists, financial analysts, and mostly people coming out of the fiscal sciences. And as an institution in the end it is not comfortable dealing with topics that you cannot quantify, you cannot define well, you cannot put in a model, that you don’t have clear indices of success or failure. So there’s a lot of talk, there is some lip service paid, but in the end the emphasis given to that is bad. You know, the Bank still doesn’t have people that are truly specialists in institutional issues, although we are increasing. It has been increasing. Twelve years ago it was zero, now it’s probably sixty or seventy. LEWIS: How would you characterize well-qualified people? Can you do it by discipline at all? Does the Bank need more political scientists, sociologists? ISRAEL: Institution building is still an art. It is basically an artistic endeavor. So who are the artists? The artists can come from several origins. It could come from political scientists who have done institutional work in developing countries. It could come from economists that are doing institutional work. [Interruption] ISRAEL: Going back, they could be economists that were involved in institutional issues. There are disciplines: there is management, there is public administration, development administration, several disciplines. And we don’t have a good synthesis of all of that. So there is in the Bank still a minimum mass of staff dealing with that. Well, to go on with the history, so then we got into the social sectors, and there are two or three other stages in the history of this that are interesting. One is when we got into more complex operations such as integrated rural development and things like that. Then the meaning of the institutional counterpart got even more muddled, first of all because it was not possible to deal only with one institution and really do a more serious long term effort, but you were dealing with fifteen or twenty or even forty or sixty sometimes in those interviews. But those failed. And they failed because of institutional constraints. They were designed by economists; it was a form of intellectual escapism. I mean, you go to a region and you say, “Well, there are twenty-six constraints to development here that we can identify, so if we handle all of them at one time this place is bound to balance.” The institutional counterpart of that is of course that you probably have to deal with twenty-six institutions as a minimum, none of which work and much less in an integrated way. So that was a rather sad stage from several points of view, including the institution. Then we got to adjustment. LEWIS: Was that a common failing in the Bank? Were there any people particularly guilty of that? As you say, it’s sort of superficially a logical way to go after it, to fix up everything at once. Was McNamara keen on that or was he just . . . ISRAEL: McNamara was keen on that for a while, but lots of people were keen on that. Arturo Israel No date, ca. 1994 - Verbatim 7 KAPUR: Was it because they perceived a signal from the top, that if the boss is keen on it we should be keen on it? ISRAEL: Yes. KAPUR: I mean, what sort of one finds when talking to a lot of people, that now everyone is very critical of IRDPs [integrated rural development programs]. And yet whenever one asks, if everyone is critical now, how did so much happen? One is, of course, the benefit of hindsight, which is always true, but there has to be—I mean, lots of people were active participants. ISRAEL: Well, why don’t you take an analogy with what’s going on now with the private sector and the public sector? It’s a fashion. Very few people are saying, you know, we’re overdoing that, we’re creating private monopolies, we are forgetting about the regulatory capacity in the public sector, et cetera, that kind of thing. Some of us are saying that now; many more will say that ten years from now when lots of things will fail. I think you have to—there is a fad effect that is particularly strong at the Bank. And I think it’s becoming stronger. That’s a hypothesis that I think you should explore. LEWIS: The fad effect, that’s interesting, because this IRDP business in the ‘70s was not peculiar to the Bank. All the bilaterals were also into that, too. ISRAEL: Yes, so they were mutually reinforcing. LEWIS: That’s right, that’s right. ISRAEL: I don’t know whether it started here or started there. It started in both places and at the same time, and it came from many things that were going on at that time when people would build roads and say this region will develop and then the region will not develop because there were constraints in agriculture, constraints in education, constraints in marketing. LEWIS: You almost make a cyclical case. There was that earlier incarnation was the cleaner development movement which was doing everything in and around the village, and then you get agriculture only, and then after a while you get dissatisfied with the sort of single track kind of approach to the thing and go back into the . . ISRAEL: And then you go back into the stage when you say it’s a few key ones that you have to deal with. And then you “macro-ize” the whole thing; you say the reason why none of these things work is because the policy environment is distorted. KAPUR: That’s why you say after IRDPs the next one was adjustment. ISRAEL: The next one was adjustment. Arturo Israel No date, ca. 1994 - Verbatim 8 LEWIS: Then you get to sort of the [Elliot] Berg report diagnosis, which is you just fix up the policies: the policies are all wrong. But no real attention to the institutional infrastructure that you need for running the policies. So that the sort of flip to a . . ISRAEL: Yeah, yeah. To a different era, and it goes overboard a different way. And that’s what happened with the institutional part, too. Several things happened that were good about that. For instance, public enterprises and public enterprise reform, I think that’s an area where the Bank has made an important contribution, an important intellectual contribution. KAPUR: What year was that? ISRAEL: I would say around 1982, ’83. KAPUR: You headed that? ISRAEL: Yeah, we started that. We started that in with Mary Shirley and John Nellis. KAPUR: This was around the same time as the ’83 public administration WDR [World Development Report]? ISRAEL: Right, right. KAPUR: In your view, is that the first major Bank intellectual document on this? ISRAEL: The first major, yes. KAPUR: I remember seeing one by Peter Wright in 1980. ISRAEL: Yes, well, there were two things. One, a position paper that I wrote in 1979 or 1980—I don’t know whether I have copies of that--which was parallel to the Peter Wright paper. KAPUR: I see. LEWIS: I remember Peter visited me in Paris in either ‘79 or ’80 and he said he was working on public administration. He was thinking then that was going to be the WDR, kind of. ISRAEL: Right, right, right. But I was working with Warren Baum because when I launched the idea of institutional development as important that came out of the first reviews of implementation. You know, I was involved in doing the first annual review of implementation, the ARDEs [Annual Review of Development Effectiveness] now. We invented that with Warren Baum in 1977. And looking at the Bank’s portfolio there it was very clear that the institutional issue—I mean, it was on management and institutions—that’s when we started to see what we were doing on that. And I remember writing a paper on that which was a position paper that launched our effort and several others, which was discussed with [Ernest] Stern and--I think it Arturo Israel No date, ca. 1994 - Verbatim 9 was already [Alden W.] Clausen by that time, not McNamara. But it was an internal piece, not published. It must be somewhere. KAPUR: If it is an internal piece I know where we can get it. If it is a Bank records, unfortunately, are very difficult, even from the archives. ISRAEL: I don’t remember the date. But it was late 1979 or early 1980. If you cannot find it—it was coming out of Warren Baum’s shop—come back and I’ll see whether I have it in my files. LEWIS: Would it be addressed to somebody like Stern? ISRAEL: It was addressed to Stern. Well, what I was saying it was in public enterprise was where we made a big jump because before it was all on individual enterprises and then we changed the outlook. We said that a large proportion of the factors determining the success of these enterprises is not in the hands of managers but it’s in the hands of the policy makers and policy managers, the ones who define and manage the rules of the game. So then the whole concept of public enterprise reform, to look at the interactions between central government agencies and public enterprises, emerged. And then restructuring, changing, improving the rules of the game, and then privatization and so on. KAPUR: That’s the ‘80s? ISRAEL: That’s the ‘80s. But there is also an institutional counterpart to adjustment which is the institutional capacity to manage policies. And from then we abandoned institutional agencies and we got into the central and core government agencies. KAPUR: Especially the ministry of finance. ISRAEL: The ministry of finance and planning agencies and administrative reform more generally, especially in Africa. And there the Bank literally jumped into that—we jumped into that completely unprepared to a totally irresponsible level. At least when McNamara would jump into things he would set up a working group, give them some resources, set up a unit and think through that before. This was completely ad hoc. No previous thinking, nothing. As the adjustment was taking place there was always a small technical assistance piece on the side dealing with institutional issues and policy management, put together any way you like, sometimes put together sometimes by macroeconomists, sometimes by YPs [young professionals], sometimes by whoever happened to be around and sometimes by the four or five people that we had at the center that were really specializing on that. LEWIS: There were no particular models? KAPUR: It was very ad hoc, basically? ISRAEL: It was ad hoc. And the first ones were just wish lists. Arturo Israel No date, ca. 1994 - Verbatim 10 KAPUR: When do you think you begin to see this happening? ’83, ’84? ISRAEL: ’82-‘83. KAPUR: ’82-’83. ISRAEL: Then by ’83-’84—as you say, this being a place with a lot of brainpower--some people in operations began to realize that they couldn’t do that, so they began to set up their own units with some people specialized. For example, in Africa there was a unit with Elkyn Chaparro. I think that was the first one. KAPUR: He had come back from Peru? ISRAEL: He had come back from Peru, right. Then they set up one in Latin America after the reorganization. KAPUR: After ‘87? ISRAEL: After ’87. Then by now you have the units in all the—but, I mean, we had them until the recent reorganization; now everything has been disbanded again. In Africa and in Latin American they protected them and in EMENA [Europe, Middle East and North Africa Region]. The one in Asia got disbanded; the one at the center, with Mary Shirley, division got disbanded. At this point there is only one person at the center in the Bank, part-time, dealing with public sector management. KAPUR: Now, I’ve been going through Stan [Stanley] Fischer’s files—there are a lot--and in that I have seen in ’89 you organized a conference at IDS [Institute of Development Studies]. What sort of a set-up? Was that a major thing? ISRAEL: It was a major thing, and then we organized a conference on institutional development at the end of ’89 here. KAPUR: Right, right. Now that initiative was yours? ISRAEL: Yes. KAPUR: Was there anything which triggered it off? Was there support from Stan? ISRAEL: The trigger of that at that point—Stan realized that this was a big issue, and he wanted to have a policy paper on institutional work. And we produced position paper, a brief, an initiating brief or something like that, and that initiating brief was discussed by the operational vice presidents under [Moeen A.] Qureshi in June ’89, I think, and it was rejected. Qureshi didn’t want to have this—our interpretation was that Qureshi didn’t want to have this thing messed up. They didn’t want a paper along those lines; they thought that the approach was wrong; it was going a different way. But it was clear we weren’t going to have the support of the operational complex to deal with it. Arturo Israel No date, ca. 1994 - Verbatim 11 LEWIS: You interpreted it that he just wanted to defend the status quo? ISRAEL: Yeah, right. And that has been acknowledged by other people. So as a second best we organized a conference that took place in December and then all sorts of papers were produced, and the idea was to publish all of that in the form of a book. But what happened simultaneously is that I left. I decided that, you know, I had been Don Quixote for a long time, so I left. I moved on. And then all the papers were published independently, but there was no synergy coming out of it. LEWIS: This thing at Sussex, it was before the conference here, is that right? ISRAEL: It was before the conference here. It was almost simultaneously with the discussion of the—it must have been, give or take a couple of weeks, it must have been May or June of ’89. LEWIS: I see. I see. KAPUR: I think September of ‘89 was the conference at IDS. LEWIS: I have it right here. June 15-16. ISRAEL: And if my memory doesn’t fail me, the meeting with Qureshi must have been between June 1st and June 6th. KAPUR: Do you have a copy of the item? Because it is not in Fischer’s files or in Qureshi’s files. ISRAEL: It must be in Mary Shirley’s files because I left all the files there. LEWIS: You said you left. You mean the institution or . . ISRAEL: No, no, I left the group working on it and I came over here. I started originally in the field of infrastructure. And then this--I didn’t ask for--this job was offered to me, and I said, “Well, you know, it’s time to move on.” But I haven’t been able to disassociate myself from the field because I’m still too identified with it and I’ve kept a lot of . . . LEWIS: Let me ask you a kind of a broad question. You express a lot of reasoned dissatisfaction with the Bank’s record in terms of institution building, and at one point you cited that some class of projects only succeed or only, as judged by the evaluators, succeed only a third of the time, and so that’s a very bad record. My question really is are there other institutions, other donor institutions, that you think rather clearly have a better record. I used to-- when I was an AID director I hit on the notion--I guess intuitively--that technical assistance was a very difficult business and if you had a good baseball batting average—that was about one- third of the time--that was about the best you could do, and two out of three would turn out to be fizzles, didn’t work somehow, you hadn’t judged the institution. So my standard, norm, was about what you’re putting down as a serious failure. Arturo Israel No date, ca. 1994 - Verbatim 12 ISRAEL: That’s an important point. I don’t want to be interpreted as a serious failure. That’s not what I mean. I was stating the fact that in one in three we succeed. Having said that, you know I said that’s to be expected because this is much more difficult than the investments. Nobody knows what is a good record on this. My judgment is that that record could be improved within the Bank if the Bank were to be willing to devote more resources and put more attention and give the right incentives to do that because you see that in those cases where that’s done, when there is a clear sense of a concatenation of positive factors and we go in at the right time with the right resources and the right people and we go out when those conditions are not in, then we do good things. So one can see that things could be done. But the way, probably, to reduce the failure is to do much less things. I think that the absorbative capacity of the countries at any point in time is less than the Bank’s lending program from an institutional point of view. LEWIS: And also the supply capacity on the Bank’s side of being able to do a variety of different things is limited. ISRAEL: Exactly, exactly. It’s limited, especially at this point, but if the Bank were to change its rules of the game and say we’re really going to take this much more seriously and build up its capacity, then that can be increased, too. So I think that on the one hand the Bank should increase its capacity and on the other hand the number attempts should be greatly reduced and really focused on those things that have a good chance of success because sometimes you see operations that you can say right here and now that the preconditions are not in place. You can predict that they are going to fail, but we go on and we patch things up by saying, “Sure, the capacity is not here, but we will bring technical assistance to do this and to do that.” KAPUR: One of the striking things in going through all these loan documents, especially on Africa, is how amazingly high is the amount of technical assistance built in every project which is actually paid for by the loan which has--quite universally, people seem to believe—has had little effect. There’s a lot of material within the Bank which questions the quality of expatriate assistance relative to loans, and yet the Bank has insisted on always adding on, even if it’s a primary education loan, even now . . ISRAEL: Well, the reason why they add it is because without it the operation does not look feasible, it’s unlikely to be implemented. What you’re saying is, “Here’s an operation at the level of a hundred which requires this capacity to be implemented of ten and we know right here and now that the capacity is two.” So you have two alternatives: one is to forget about the operation or reduce it or say, “I’m going to provide the eight missing through technical assistance.” So then the thing has to go. What we all know is it has never happened, that when you do that at that level in most African countries the technical assistance has failed. KAPUR: Has the [Willi W.A.] Wapenhans report, you think, brought that, these things, into the discussions of the report? Arturo Israel No date, ca. 1994 - Verbatim 13 ISRAEL: Not totally in the open. The Wapenhans (I’ll have to go in a couple of minutes, unfortunately, and I apologize for this), they don’t draw the final conclusion. The conclusion is that the Bank should do much less. There is really scope for serious operations at level a much lower than what we are doing now. So it doesn’t really face it. LEWIS: Much less in terms of volume of activity or fewer subjects? ISRAEL: Both, probably. In a specific country, both. Unless you greatly increase—I mean you can mitigate that reduction by devoting a larger proportion of Bank resources to more direct and much more expensive type of analysis and preparation. KAPUR: I am wondering if you might have, over the next few weeks, if you can give us some material to read. I have got a fair amount of stuff, but especially on [inaudible] interesting examples of successes and failures? If you could send it . . ISRAEL: Do me a favor--would you like to meet again and go over some of the details? LEWIS: Yes, indeed, ISRAEL: I’ll be away next week but then I’ll be back. LEWIS: And then Richard will be back. [End of interview] Arturo Israel No date, ca. 1994 - Verbatim