79018 THE WORLD BANK GROUP ORAL HISTORY PROGRAM Transcript of interview with ANN 0. HAMILTON April 10, 2006 Washington, D.C. Interview by: Marie T. Zenni ZENNI: Good morning. I'm Marie Zenni, Senior Interviewer for the Bank 's Oral History Program. HAMILTON: And I'm Ann Hamilton . ZENNI: Today is Monday, April 10, 2006, and I'm here at World Bank headquarters to interview Ann Hamilton, who re t ired from the Bank back around the end of 1997 as senior adviser to the Vice President for South Asia. Welcome, Ms . Hamilton . HAMILTON: Thank you very much. ZENNI: I would like to begin by asking you to discuss your background in general, including your educational background, and how you became interested in international economic de v elopment. HAMIL TON: Well, let's see. I was born and grew up in Texas, which probably accounts for my outspokenness and my, you know , general rudeness all around. But I went to college in the East at Wellesle y and never went back to Texas. Then after graduating in economics, I went on to the London School of Econom ic·s where I didn't study very much a t all, but wh a t I did study w as international e conomics. So in early 1961, I got my mast e r's in e conomic science from LS E and came back to answer the call of John Kennedy to serv e my country . I wa s also following a young man who wa s also a nswering the call , which m a de the choice fairly easy. W e broke up a year or so la ter, but we're still fri e nds. He e ventually becam e the U.S . Ex e cutive Director of the World Bank, showing what a small world it is; his name was Charles Cooper. But, anyway , I came to Washington to look for work, and the two places that seemed interested in hiring me w e re th e Agenc y for International Developm e nt which was brand n e w in tho se days- - it had just chan ged its name to AID- -a nd th e P ea c e Corps. I w e nt to work for th e P e ace Corps in its very e a rly d a ys. T here w e r e probably 20 employees there at the time, in April of '61 . ZENNI: How old was the Peace Corps then? HAMIL TON: It didn't ev e n e xist. I m ea n , it hadn't e ve n b ee n leg is lat e d yet. One o f my f ir s t jobs w as working a lot on th e esta blishin g leg is la tion a nd speeches, and the congressional present a tion , and then definin g what a Peace Corps was, which wa s pretty interes ting . We kind of invented the Peace Corps. It w a s very excitin g be ing there a t t ha t time. It w a s probabl y t wo years from th e time I arriv e d befor e the fir s t v olunte ers w e nt o ve rseas be c aus e they had to se t up tra ining pro g rams a nd admissions crit e ri a a nd r e cruitm e nt and a ll kind s of s tu ff. And I w as lucky e no u g h to partici pa t e in a ll o f th a t. I w as eve n lu c ki er Ann 0. Hamilton April 10, 2006 - Final Edited 2 because when I left the Peace Corps, I was scheduled to go to what was then called the Budget Bureau, now OMB, the Office of Management and Budget. But, anyway, in those days it wasn't management; it was just budget, the Budget Bureau. And that was February of '64. And just then, Lyndon Johnson established the War on Poverty, and I begged Sargent Shriver to take me with him to the War on Poverty, which he did. Once again there was no staff. Everybody was seconded from some other agency. We moved offices about once every two weeks wherever we could scrounge free space. And once again, I got to participate in the invention of an agency. That was very exciting: you know, what kind of activities would be in the poverty program; what would it call itself; again, drafting the enabling legislation, et cetera. It was terrific fun. But then the Budget Bureau got tired of paying my salary without having had me work there for a single day. So they called me back in about November or December of '64, and I stayed there until my third child was born, when I retired briefly. That 1969. Now, we're getting close to the World Bank. The entire time I worked at the Budget Bureau I was working on the aid program and on the South Asia part of the aid program. Greg [Gregory B.] Votaw, who was deputy director of the South Asia Department here at the Bank, was somebody whom I had bumped into both socially and professionally all over town. And every time I saw him, he said, "When are you going to come work for us?" And I said, "Not yet, Greg, not yet," because I loved my job at the Budget Bureau. When I had been retired for about 18 months I bumped into Greg at a party, and he said, "When are you going to come work for us?" And. I said, "How about tomorrow?" calling his bluff completely. But, by golly, one thing led to another and I did join the World Bank. I also am proud of my ground-breaking experience here, in that I insisted on working part-time, and I think I was the first person ever to do that at the Bank . They couldn't imagine that back in 1970. They couldn't hire me as a regular staff member because they had no provision for part- time staff. They hired me as a consultant, and except for translators - - they had part-time translators--! do not think they had any other part-time staff and had not figured out how to handle it. So I like to think that I broke ground for future generations of part- time staff, especially women. I joined, working three days a week. And then at the end of the year I looked over my time sheets and realized that I was reall y working four days a week , so I said, "Okay , I'll increase my contract by a day and work four days a we e k" . And at the e nd of that y e ar , I realized that I was Ann 0. Hamilton Apri/10, 2006- Final Edited 3 really working five days a week, which meant that I could get a 25-percent increase in salary with no change at all in my work habits. So I agreed to join the staff as a regular staff member. ZENNI: And that was when exactly? HAMIL TON: That must have been '72, I guess. The personnel records are rather inaccurate because sometimes they say I joined in '70, sometimes they say I joined in '71 when my consultant contract was renewed, and sometimes they say I joined in '72. ZENNI: Well, the record I received from HR indicates that you joined officially as a full-time regular staff in November of '71. HAMILTON: Maybe regular staff, but not yet full-time. It was probably the next year that I said I would like my 25-percent pay increase by admitting that I'm working five days a week, because l was a real workaholic. I mean, I really worked eight days a week. ZENNI: So you joined in November of '71 as a regular staff in the early period of the [Robert S .] MeN amara era as loan officer/economist in the India Division, South Asia Department. Please describe your first assignment in terms of responsibilities and areas of particular focus. HAMILTON: Actually, my first assignment was fascinating. Peter Cargill was direct.or at the time of South Asia. At that time, Ed [EdwardS .] Mason and Bob [Robert E.] Asher were writing their history of the World Bank, and they needed somebody to do the history of the Bank's involvement in India. Since I was a brand new staff member- and part-time at that--and they didn't know what to do with me, my main task for a couple of months was interviewing all of the old- timers in the India program, going way back to the beginning. And that was really terrific because it gave me (a) a bunch of friends, ready-made, and (b) the most fascinating background on the Bank's history in India. I remember Ben [Benjamin B.] King and Peter Wright--and Ben was really important--and, of course, Peter Cargill himself, and the Indian officials who happened to be coming through town. I learned a lot about the India program. I was really lucky to have had an excuse to talk to the greats and the near-greats. I was always very honored that I was mentioned in the acknowledgements of the Mason and Asher book for my work as a brand new staff member in providing them background information on India. That was really terrific for my sort of unusual first assignment. My other first assignment was a fertilizer project. I became the fertilizer queen. I can't remember which project was my first one, but I worked on a whole series Ann 0. Hamilton April 10, 2006 - Final Edited 4 of ferti I izer projects. They said, "So do you want to be a loan officer or do you want to be an economist?" And I said, " They both sound great; I can't choose." And so I was a loan officer/economist, which was very exciting, except that as the computer program got more and more fi lied, they had less space to put a ti tie in to it, so it got gradually truncated, which reflected exactly my own career. The immediacy of loan officer work completely crowded out the long-term analytical thinking of the economic work. So I moved from being a loan officer/economist to a loan officer/econ, to a loan officer/ec, to a loan officer, which pretty accurately reflected the' content of my work, as well. In those early days, I was your standard loan officer on all kinds of fertilizer projects, Calcutta urban development, and a lot of Indian Railways projects. Probably the most exciting one I ever dealt with was the Bank's first oil project, which was the Bombay High project. I was Ms. Infrastructure. I was the thing that went out of favor and is now moving back into favor. Of course, the project officers did the real analytic work on the project, and I just massaged staff appraisal reports and made sure that they made sense and hung together and answered all the right questions and read well. That was an important part of any project. ZENNI: Okay. Since appraisal reports contain the basic technical documents of a project, i ncl ud i ng basic j usti fica ti on for the Bank's involvement, how would you assess the procedural guidelines governing their content and structure, and the impact of that on project design and proj e ct outcome? HAMIL TON: That's a tough question. It was time-consuming , it was very presentational, but I think the emphasis that was put on clear presentation and the number of layers of review, which were numerous, was pretty valuable and time pretty well-spent. By the time you got to the Board [of Executive Directors], through yellow, gree n and gray, and throu g h th e Loan Committee and the Legal Department, and through the procurement people, and through other reviewers, you had checked all aspects of the project very thoroughly . It was alleged, and it is probably true , that that put a disproportionate amount of weight on the up-front part and inadequate w e ight on the implementation part. But as for th e up-front part, I think it was a valuable experience. It certainly could have been streamlined a little bit. I think it has probably been streamlined too much, because now that kind of ex ante quality control--I don't really know, but I think--is probably non-existent, or at least hardly exists. ZENNI: W e ll , now the focus is on outcom e and impact. Ann 0. Hamilton Aprill 0, 2006 - Final Edited 5 HAMIL TON: Which, of course, you cannot measure for decades. That's a lot of loose talk as far as I'm concerned. In the appraisal report, you could promise things, but you couldn't be sure they would be reflected in the outcomes. First of all, you've got maybe a five-year project implementation period to see whether it even works the way it was supposed to on the ground. And then how do you measure outcomes? Suppose it does work, suppose it does turn out power or railroad cars , it is decades before you could measure the impact of tha t on the country. I kind of liked the old system because I felt I had a huge support system. The entire Bank was hard at work making sure m y appraisal report and everybody else's appraisal report was as good as it could be . It made me feel secure to know that all those fancy people were helping me write this report. Some people groused about the editing and the improvement. I enjoyed it ; I loved it. I found it valuable. ZENNI: Since your work was focused mostly in India . HAMIL TON: Entirely, yes. ZENNI: Yes. How would you describe the Bank's engagement in South Asia, and specifically, in India at the time? HAMIL TON: Well, India was always special to the Bank . I always said that the Bank needed India more than India needed the Bank. To take a step asi de , and jumping ahead a little bit, too , I've always said tha t there are thr ee kinds of cases in the Bank, two of which are virtually unique. One , w here you've go t client countries who do whatever the Bank says . They ma y und erstand w hat they have agreed to do , they may not , but they just say yes, and the y probably try to do it. And the Bank is the boss a nd th e c ountry is the subserv ient partner. In the case of India , that was almost rev e rs e d. Every bod y pret e nded that it wasn't so, but it was. The way I could work well with the Indians was to say, "Look , here is what I need for Bank purposes. Wh a t do you need for Indian gove rnment purposes ? Now, where 's the common g round so th at we can make this work? I don't want to argue." The third kind was my later work on Indon es ia which was very nearl y an eq ual partne~ship , and it was the onl y case that I had seen of tha t. That , too, has disappe a red. But coming back to th e question--we'll come to Indonesia later-- one had no choice, and wanted no choice, other than to listen to the government , to understand why the y wa nted to do it th e way the y wa nt ed to do it, to understa nd what their cons train ts were a nd to t r y to accommodate tho se constraints . And they were smart enough to be a ble to pack age and articulate their position enough so that it pleased us while pl eas in g them. But it was a sensational relationship because as lo ng as y ou kn e w a nd accep t e d t h at , you h ad to respect them completely. Ann 0. Hamilton April 10, 2006 - Final Edited 6 ZENNI: Well, there is a long-held view that the Bank's relationship with India- a nd you've already spoken to that--was unique and that the Bank learned more from its experience in India than India learned from the Bank. How do you see this? HAMILTON: Well, first of all, the India Consortium was the first aid group established, from which virtually all other countries have now learned. It was established shortly before my time, sometime in the '60s, but it was the first and, for a very long time, the only aid group. It was the model for aid groups and how they worked and how donors got to get her and talked to the borrowing country. What happened was, you sat round the table and every single country gave a little lecture to the government, who had to sit there and listen and take it, abou t what policies they wanted to see followed and what changes they wanted to see made. And, I remember the then-Secretary of Finance, I.G. Patel , saying at the end of one long day--because they were always two-day meetings--"Listen , at the rate of $1 billion a day, I can listen to anything." That sort of said it all. He w as listening politely while every single donor country ventilated a little bit, and then he took the money and went home and followed his own polic y agenda. And it was a superb civil service that we were working with, better than the American civil service, probably as good as the British civil service whose model it was based on . They were educated, intelligent. Of course we learned from them. They knew what they were doing. ZENNI: Okay , we'll come back to India a little later. Meanwhile, following through with your career a little chronological ly at this point, in 1972, a comprehensive examination of the Bank's organization and structure took place under McNamara, resulting in a major reorganization in October of '72 to decentralize Bank operations. What impact did this have on your work at the time? HAMILTON: I can hardly remember an impact on my actual work. It was certainly disruptive in the extreme. It was disruptive even before it happened , for as long as one anticipated it , because you knew changes were in the wind and you didn't know what they were. So it slowed things down and made everybody very anxious for a while before it happened. And then it h a ppened. Prior to that reorganization there was a Projects Department and se v eral Programs Departments, which worked very well. The reorgani za tion put the project staff inside each region wh e re there was a projects and a program department. In the end, I thought it was a step backward , but it was prett y uninteresting. Ann 0. Hamilton April 10, 2006- Final Edited 7 ZENNI: So in terms of achievements, what would you say the '72 reorganization achieved? HAMILTON: Primarily disruption. One of our standard jokes was how they changed every so often from one Asia Department to two Asia Departments (South and East), back to one Asia Department, and then back to two Asia departments, several times. We often said, "Oh, so now it's time to go back to one, or to split us into two." It made them feel like progress was being made. They, the leadership, somebody, had a strong view that option A was better than option B, and so it was implemented. It was very disruptive, and pretty soon, like water, it sort of settled back down to its own level and people figured out a way to work. One of the beauties of the Bank is that everybody cares about their work, so no matter what the reorganizers are doing, people find a way to do their work. But I think all of these reorganizations are silly, unnecessary and unbelievably disruptive. Sometimes changes need to be made, but they can be made piecemeal. But every president needs to put his imprimatur on things; we had the McNamara reorganization, the [Barber B.] Conable reorganization, and the whoever-it-was, reorganization. ZENNI: You remained in South Asia for quite a while, actually up until July of '83. In the interim, you were promoted in January of '7 5 to senior loan officer, then in '78 to division chief. Please discuss highlights of how your work evolved during thi"s period. And, as line manager, what did this entail in terms of additional responsibilities for you? HAMILTON: Well, the change from loan officer to senior loan officer was nothing but more money, a higher salary, which was certainly all to the good. The promotion to division chief was a fundamental change. Bilsel Alisbah had been the previous division chief and he was promoted to director somewhere, either in East or West Africa. I forget where he went, but he went, and I was made acting division chief because I'd been there longer than anybody and was the most senior, if not the only senior loan officer. They were very reluctant to make me division chief because I'd been there so long, and the Bank was very much into movement, circulating. Everybody blamed ever y body else. David Hopper, who was the vice president, said that the person blocking my promotion was Ernie [Ernest] Stern, who said I'd been there too long. I went to Ernie Stern, who was a good friend, and said, "If you're telling me I've been there too long for the good of the Bank, I'll listen to you because it's your job. If you're telling me I've been there too long for my own good, you're wrong, and that's my job. Here's what I do best, and here's what I want to do." Ann 0. Hamilton April 10, 2006- Final Edited 8 Finally, after an endless period as acting--I don't even remember how long it was between the date of Bilsel's departure and the date of my actual promotion, but it was very long-- I was fi nail y made division chief. I remember B i lsel gave me a T- shirt that said "division chief" with a huge question mark undernea t h it. It did go on for a I ong time whi I e they dithered. But they finally made me division chief. What year was that that? ZENNI: December '78, according to the HR records. HAMIL TON: By then, I'd been there for, depending on how you count , six or seven or eight years, which was (a) about the right length of time to understand what I was doing and to get to know the system, but ( b) too long for their t aste because it meant that they were committed to another two or three years. Now, I happen to think that 10 years or even 12 is not too long in an assignmen t, but it made them very anxious. ZENNI: So what did this entail in terms of additional responsibilities as a line manager? HAMIL TON: As an actual manager it was sad for me because instead of ma.naging projects, I managed people who managed projects. I was a very hands-on person so I had to just knock myself out not to interfere in their day- to-day work. Mostly I think they appreciated it because I was helpf ul to them. It was before the days of attitude surveys, so I don 't even know whether th ey loved or hated it, but I think a lot of people enjoyed it. Of course, some didn't. As a manager, I was one step removed, which was a place I was less happ y than doing the actual work. Managing the people doing the work was less fun. But I didn't want anybody else to be division chief, so I'm glad I got the job. ZENNI: Now turning to world events at that time, there were the two oil shocks in '73 and '79 that had major economic repercussions world w ide . Please discuss the Bank 's approach in enabling South Asian countries to bette r adjust economically. And how did this impact your work on India at the time? HAMIL TON: Two ways that I can think of. On e was just more of th e same . India was always a poor country with foreign exchange constraints and budg e tary constraints, and the oil shock just made those constraints a lit tle bit worse. So you just had to work a little bit harder-or, more accurately, the y had to work a little bit harder--to deal with the foreign exchange constraint and the budgeta ry constraint. T h e re was no qualitative ch ange in the relationship that I can remember. T he other thin g that happened was- - in a year that I can't r eme mb er--w as that India discovered a huge oil reserve in the Arabian Sea, off the coast of Bombay. It was a field called Bombay High. Well, I can tell yo u for sure it was when Ann 0. Hamilton April 10, 2006 - Final Edited 9 Bilsel Alisbah was division chief. We went out to try to persuade the government of India and the chairman of the Oil and Natural Gas Commission, who was a very powerful guy, that they should let the Bank in on this work. The whole world was sniffing around. I mean, here was a major oil projec t, a major find. There was big money in it. Private sector oil companies were d y ing to get in. The Indian government was determined to keep it within t he public sector and they sure didn't want the Bank messing around in their oil sector. But we won over the government and the chairman of the Oil and Na tural Gas Commission. We were sensational salesmen of the Bank. And that was more fun than I've ever had because all of a sudden Indi a was on the winning side instead of the losing side of the oil shocks. And the y did a phenomenal job of developing that field very fast. ZENNI: And what was your contribution? HAMIL TON: I was the loan officer on that. It was the biggest and most important project I ever handled. It was huge. We moved unbelievabl y fast. ZENNI: And what was it called? HAMILTON: The Bombay High Petroleum Project, I suppose. But nobod y has ever worked harder or faster. A Frenchman .. ZENNI: Yves Rovani? HAMILTON: No. Yves Rovani was the department dir ecto r. He would walk around saying in his very French accent, "This is not going to work. Cargill does not like oil." And I said, "Don't worr y, Yves, I'm going to make Cargill like oil; this pr oject is going to work ." Philippe Bourcier was the proje c t officer--we worked tog et her every step of the way. This was the way a proje ct officer and a loan officer sho uld work toge th er. We worked 20 hours a day. We got that project ready a nd within two months it was perfect. We had covered every teensy aspect and it was great fu n . And I'm still friends with that chairman of th e Oil a nd Natural Gas Co mmi ss ion. ZENNI: The '70s and '80s saw a shift in the B a nk's sec toral pattern of project l en din g more towards agriculture and the socia l sectors . What impact d id this have on your work in India, and how would yo u characterize the effectiveness of the Bank's approach--more emphasis o n agriculture a nd the soc ia l sec tors ? HAMILTON: Well, what I re member about agriculture was the in frast ru ct ure bit , irri gat ion. There was always a lot of emphas is on irrigation, and it didn't Ann 0. Hamilton April] 0, 2006- Final Edited 10 change much. Were there more community development integrated agricultural development projects? If so, I don't remember them much. In the social sectors, India didn't want us in there, and so we were not in there. The Secretary of Education said, "I don't want you mucking around in my curricula. The education of our children and the content of the textbooks is too important. I don't want somebody calling the shots from 5,000 miles away." Some people thought we could make a big difference to Indian education. I thought he was right. Since then--after the Bank got better at lending for education and after the Indian government got more aware of the fact that we didn't impose political views on textbooks or anything else--a good relationship developed, but that was way after my time. During my time, India was always very conservative in these new initiatives and they didn't take hold. ZENNI: In terms of financing, South Asia inc! udes some of IBRD [International Bank for Reconstruction and Development] and IDA's [International Development Association] largest and oldest borrowers. India is dependent almost entirely on the Bank and IDA for its multilateral borrowing. Based on your experience, how well did IBRD and IDA projects serve India's overall development priorities in terms of poverty alleviation at the time? HAMIL TON: Well, that's quite a basic philosophical question because it depends on how you feel about, in effect, trickle-down economics. I mean, if you build irrigation projects, the farmers at the top of the water flow, who are already the better-off farmers, benefit enormously. The benefit gets less and less and less as you go down to the tail-end farmers who get very little water. But does the existence of the irrigation project, the fact that there's just more wealth in that area, help the poor farmer enough to justify the investment at all? It's even trickier with, say, electric power. How do you measure the impact of being able to turn on a light or run a pump for irrigation or for drinking water or for whatever? I don't know how to trace the impact of that on poverty. The same is true about India's goal of producing more fertilizer. It goes to the richest farmers first and the poorest farmers Iast, but if you don't have the fertilizer, nobody benefits and there's no trickle-down effect with everybody benefiting a I i ttle bit. Take rai I ways, high ways--the fact that people can travel-- it's all the same question. So the first part of your question a bout how did it help and affect India's policies ? The answer is hugely well and effectively. How did it affect poverty? I'll never know. ZENNI: How would you characterize the Bank's policy dialogue with India at the time? HAMIL TON: Well, it obviously had a major impact in the long run. Our policy dialogue said, "Give the private sector more scope, give them more room; don't do everything in the public sector," which was their model for most of the Ann 0. Hamilton April] 0, 2006 - Final Edited 11 arly years. And very slow, incremental changes were made, until today look at ndia. It's amazing, and I do believe that our olic advice was like water on a stone. It ot throu h. > 0 z So the answer is, the polic y dialogue worked. overdoing it. We pushed them forward. ZENNI: How did your experience in India back then shape y our fut ure ideas on development? HAMIL TON: I was a believer in foreign aid then. I have become less of a believer over the years as I look at countries that need it most, like Afric an countries, where I'm not sure about the impact. But I believ ed in foreign a id. My husband had been the staff director of the (Lester B.] Pearson Commission, which was put together to promote, rationalize, and justify foreign aid. My experience in India on I y confirmed m y belie f that foreign aid works. ZENNI: Right. In August of '83, you moved to the East Asia and Pacific Region Country Program Department as chief of the Indonesia Division . Please describe the circumstances of yo ur move . Why did yo u go to East Asia, Indonesia? HAMILTON: I think the circumstances would best be described as a meat market. They were having a di v ision chief re ass ignment panel. It was a nightmare. It wasn't that I wanted to leave my position or that anybody particularly wanted me. It was that a number of di v ision chiefs who had been there for a long time or who . ZENNI: Had to rotate? HAMIL TON: Had to rotate, and the y were all put into a pool where it was a game of musical chairs . You went and tried to sell yo urself to the director of any department y ou could bear the idea of serving in. And certainly, of what was avai lab) e , Indonesia was my first choice. I was I ucky enough to get the Indonesia job. ZENNI: What were your main responsibilities and what objectives did you set out to accomplish? HAMILTON: In Indonesia? ZENNI: In Indonesia, yes. Ann 0. Hamilton April 10, 2006 - Final Edited 12 HAMILTON: Remember, I arrived unenthusiastically . It wasn't that I .. ZENNI: Even though it was yo ur first choice? HAMILTON: Yes, but it was really my second choice because India was my first choice. I didn't want to move, and the process , as I say, was I ike a slave auction; it was horrible. When they have those reassignment panels, they 're just terrible. I'm not sure there's a better way to do it, but it was terrible. So I was agreeable, but not wildly enthusiastic. The Indonesia program was very unusual from its earliest days, from its origins when Robert McNamara started the program in Indonesia and sent Bernie [Bernard R.] Bell out as his man on Indonesia. Bernie didn't report to anybody except McNamara; he reported directly to McNamara. The Indonesians knew it. He became a very trusted advisor to the Indonesians. I remember his wife later said to him , "Bernie, you are their magic amulet. The Indon esians trust whatever you say." That situation set up a very special relationship with th e field office. Washington was irrelevant to the Indonesia pro gram , and it had remained largely irrelevant to the Indonesia program right up until my day. My objective was simply to get along with the guy in the field, and for as long as I was there the locus of power was in Jakarta. Happily, telephone and fax communications were improving every single day. And everyday the economist here , who was Mark Baird for most of my time , talked to Javed Khalilzadeh Shirazi, the economist in Jakarta. And every day I talked to Lars Jeurling, who was the loan officer there, and all we tried to do was make sure we we re talking the same language. And whoever th e res rep was, whether it was Russ [Russe ll J.) Cheetham or D.C. Rao, he called the shots. ZENNI: How did th e Indonesia set-up impact polic y dialo gue? HAMILTON: Not at all. The Indonesians knew ho w to play the Bank's game better than the Bank did. ZENNI: Eve n in '83 when you took over? Because the field office was set up back in '68. HAMIL TON: Yes. T he lesson that I had lea rned was that my boss was in Jakarta. I was ca lled division chief for both India and Indonesia, and both countries are very smart about, title notwithst and in g, who's go t power, and who can m ake things happen. It was why I was a successful se nior loan officer in India . They knew that I co uld make things h appen, that I h ad enough influence with t h e po wers that be , so they respected me . When Jochen Kraske was out there , they liste ned t o him , Ann 0. Hamilton April 10, 2006- Final Edited 13 but they listened to me about as much. When other res reps were out there, the y didn't listen to them at all. They listened mostly to me. And the same was true in Indonesia. They knew strength and the y knew weakness when they saw it. And so, in Indonesia I didn't fig ht the situation. The Bank always sent very strong representatives out there. It was a plum res rep position, Jakarta was, and those guys were very strong an d very smart and not worth jockeying for position with . I just helped them do whatever they wanted to do. My capacity as division chief was like a bag carrier. ZENNI: How did your previ,ous experience in India help you tackle thos~ challenges? HAMIL TON: The challenges were pretty easy because I didn't do anything except what I was told to do . Gautham Kaji was the department director at the time, and he just said to me, " I'm keeping my hands off of Indonesia; I 'm not managing Indonesia; Russ Cheetham or D.C. Rao is managing Indonesia." So for me , in Washington, it was almost, as I say, a bag-carrying job . ZENNI: How much of a factor was corruption at the time in Indonesia? HAMILTON: It cycled; it got worse during the period I was there. We knew it existed. In my view, current fashion notwithstandin g, corruption exists everywhere, low-lev e l corruption; junior, under-paid civil servants who take a little something to do their job because it makes a difference. I don't object to mild, low-level , chicken-feed corruption. I wa tched it get worse ove r time in India. Indeed , another extremely interesting moment of my Indian career was w hen we refused to declare a project effective because the main contract, which was a condition of effectiveness, had been clearly let throu g h bribery and corrup t ion and wasn't awarded to the best contractor. It was a power project. ZENNI: · When was that, early '80s, late '80s ? HAMILTON: It must have been in the mid or late '70s . The Indian government argued their heads off. But David Hopper, bl ess his heart, stood behind me and we refused to de c lare it effective. The project lap sed. Hundreds of millions of dollars evaporated, and the Indians , w ho had officially argued as hard as they kn ew how , later were very complimentary and fla ttering. They were glad we had done it. As officials, they had to argue to hang on to $200 million, but they knew there was corruption, an d they knew th at it wo uld n ' t be a good project, and they respected us for it , which was very, very nice. Ann 0. Hamilton April 10, 2006 - Final Edited 14 Well, the same was kind of true in Indonesia. Corruption existed. Indonesia was different in that it existed at very high levels. It was the president's family and they did all kinds of evil things. But it wasn't bad enough to impact the economy, the dialogue. It was just a certain proportion of the budget which was wasted. It's true here in the U.S. It's true everywhere. Now, Indonesian corruption got bad enough, I guess--or we got politically correct enough; I'm not sure which--to start to make a great big issue out of it. It was probably some combination because things did get very bad in Indonesia after my time. They were sti II pretty much amateurs at it during my time. They just got greedier and greedier, and it was basically the president's family and his huge interlocking network of companies. They just went over the top. ZENNI: And the Bank's role in that was .. HAMIL TON: It was after my time . There were major issues between Dennis De Tray, who was the rep out there then, and [James D.] Wolfensohn, fights about corruption. ZENNI: Yes, so that's then in the second half of the '90s. HAMILTON: Was it that late? ZENNI: Yes, because Wolfensohn came in '95. HAMIL TON: Yes. Up until then, we knew it, and we looked the other way because we still had a lot to do by way of development and policy dialogue. And policy still mattered. You couldn't let the tail of corruption wag the dog, and maybe the tail got too big. I don't know whether our stiff-necked position was justified or not. ZENNI: Talking about decentralization and following through with your discussion on the set-up in Indonesia where mostly the decision-makers were actually in the resident mission , what are your views, in general, on the advantages and disadvantages of decentralization in terms of bringing the Bank closer to its clients? How do you see this? HAMILTON: Well , I certainly see both sides. It certainly brings the Bank closer to the client. It may bring the Bank too close to the client. It may mean that there is no countervailing force, that all you do is what the client wants. In Indonesi a, what those res reps --all of them, from Bernie Bell on--wa nted to do was to keep the goodwill and trust of the Indonesians. That was the benchmark , not any other standard of performance. It was how much the Indon es ians liked you , because if they didn't like you, you were frozen out and not allowed to fully participate. That's a! ways true with resident missions and field offices. The measure is how much does the borrower like them; if the govern ment Ann 0. Hamilton Aprill 0, 2006- Final Edited - - ·· ---- --------~ 15 d-oesn't like the individuals in the field office, the Bank staff can't do anything sitting there in the capital city not being invited to meetings and not having anything happen. So there's a strong incentive to get along. On the other hand, you're right there where the action is and you can follow what's going on in the country much, much more closely. Another downside of decentralization is the cost, which is huge. And there is a very big advantage to talking to your colleagues in Washington, exchanging information, and learning about different things that are happening here. There's nothing like face-to-face meetings with everybody involved with a project all in the same city, Washington. Now, of course, communications have improved so much now with teleconferencing, telephoning , and faxing; everybody is walking around with a Blackberry, e-mailing, etcetera. It's a different universe. You do have something close to conversation with everybody . I, being old-fashioned, am still convinced that nothing beats a face- to-face conversation, but the field people get back here often enough. The short answer is, I think--this is not a short answer , this is a long answer--what I said before: where is the strength and where is the weakness? And it doesn't matter where it is in Washington or the field-very much because the government can sense it, the interlocutors can sense it. And so, when you've got a strong country director in the field, decentralization makes it easier for key people in the country to talk to him. Where you've got a weak one , centralization is more valuable than decentralization. I don't think there's a standard answer, nor do I think the answer is reall y based on the merits. Once again it's one of those cases where it becomes fas hionable to decentralize and all of a sudden everything is decentralized. I would much rather have seen, as you say, an incremental approach. For example, in a particular country, it might be better if there were more presence in the field and less in Washington, but it's now universal, with all of its pros and cons. ZENNI: Well , the South Asia Region became the most d ece ntrali ze d regio n in '97 , with some 66 percent of its staff located in the field. HAMILTON: That's because Mieko went crazy. Mieko Nishimizu was th e hi g h priestess of getting touchy-feely with the client. ZENNI: Mieko says that this had started already before she came , that this w as already in motion. HAMIL TON: She pushed it. She got religion , literally and figuratively. It may have been slightly in motion. I have no doubt that there m ay ha ve b ee n more pres e nce in the field than in pre vious yea rs , but she is th e one th at se nt everybody out to sleep in a village--your ultimate decentrali za tion . Ann 0. Hamilton April 10, 2006 - Final Edited 16 ZENNI: While on the subject of Indonesia, the World Bank is a key member of the Consultative Group , which groups together Indonesia's main foreign creditors, and the same members also sit in the Paris Club as Indonesia's sovereign creditors. Based on your experience, how would you assess the value- added impact of the CGI [Consultative Group on Indonesia], as it is known, in mobilizing resources and affecting general macroeconomic reforms? HAMIL TON: Most of my answer to that question would be based on the India Consortium, with which I had a lot more experience and which I understood a lot better. For one thing , the Bank chaired the India Consortium. The government of the Netherlands then, and I don't know who now, but it's not the Bank that chaired the CGI, and it always met in the Netherlands . But all that said, certainly for India, and almost certainly for Indonesia, the group performs an extremely useful function in providing cover for the donors. It's easier for them, for the aid agency of the Netherlands or France or wherever, to go back to their Ministry of Finance and say, " We need money for this country because everybody else is giving and here's how much they're giving and here's our share." If you're part of a team, it's valuable to the aid agencies, and I'm sure helps them to mobilize money. And it makes some difference in coordinating policies . I rhean, if you've got somebody who's advocating something that everybody else disagrees with, it's an opportunity to discuss it and argue it out. ZENNI: So there is value-added? HAMIL TON: Oh, yes, I definitely think so. ZENNI: Coming back to y ou , in September of ' 86 you received a grade promotion whil e serving as chief of the Indonesia Division. Please discuss th e circumstances leading to this, and what did it entail in terms of overall responsibilities? HAMIL TON: I had forgotten about that. The answer to the second half of your qu estion is that it didn't chan ge a thin g. The answer to the first half is that there was a study made and somehow it was felt that some division chiefs were more equal than oth e r division chiefs. Some countries were mor e important. I guess that was it. Was it the size of the lending program? Was it the size of the staff? Was it th e si z e o f the country ? And the big g ie s- -whi c h w e re India and Brazil for sure , and I don't know who else--were clearly de e med worthy of promotion, but I wasn ' t sure about Indonesia. I was worri e d that Indon e sia was going to be right on the cusp and might not make the cut. And I rem e mb e r making eloquent arguments for how important my job was and how burdensome and how big the country was and how bi g my st a ff was , so that I could be on e o f Ann 0. Hamilton Aprill 0, 2006 - Final Edited 17 the three or four division chiefs who were ranked higher than other division chiefs. It's probably true that if you're a division chief with a 13-country department or a division, as in some Central American or South Pacific units, you could probably argue that the job is much harder, having to keep 13 countries straight in your head, than mine having to keep only one country straight in my head. But as long as they were coming up with a higher class of division chief, I sure wanted to be in that class. ZENNI: Was it reflective also of the size of the lending portfolio? HAMIL TON: I can't remember. I don't know what their criteria were. There was a little task force that was doing that, and there was a lot of discussion about it, and I don't really remember the details. Indeed, as I say, I'd forgotten about it and I'd forgotten that I was one of the beneficiaries, although I do remember wanting to benefit if this distinction was going to be made. ZENNI: You have worked in both South and East Asia. Based on that experience, how did you at the time see the differences in economic performance between these two regions where contrasts have been extreme? HAMILTON: I guess you're talking about the Asian miracle of East Asia and the sluggish performance of South Asia. ZENNI: Yes. HAMILTON: The only explanations that I can come up with are: (a) culture. You just can't beat the East Asian culture--the Chinese, Japanese , Vietnamese culture--for achievement, striving, and hard work. One of my more striking experiences was in Calcutta (I think it was there). Anyway, a Sites and Services project which provided a cement slab, the sides of a house, maybe some walls and some pi urn bing connections and maybe some electrical connections, and that was it. And then you said to a family, you buy this slab for virtually no money and now you have a home. The same thing, called a Kampung Improvement Project, happened in Indonesia. In India, if you visit these projects, several years later, what you had were the original concrete slabs with a tin roof over them and people surviving in them. At least the rain wasn't falling on them anymore, but that was pretty much it. By contrast, in Indonesia what you had were houses painted bright colors with little white picket fences around them and flowers growing in front. It was explained to me, and I came to believe it, that in India those terribly poor urban dwellers lived in the after-life. There was so little hope here and now. It was about survival. That was their strongest aspiration, just to survive and look Ann 0. Hamilton April] 0, 2006- Final Edited 18 forward to something better in the next incarnation, Whereas in Indonesia, typical of East Asia, it was here and now, making the best of it right here and now, and it showed. That's just one manifestation of the cultural effect. So I think culture has something to do with it. Another factor was much more pragmatic; it was what economic model they were using. The Indians--and South Asians in general, but India was leading the pack-used pretty much the Soviet central-planning, government-controlled model, which looked very good in the '60s. But the y stuck w ith that model long after its promise had faded, whereas the East Asians were ve ry quick to recognize that the private sector profit motive was a good thing. And, indeed, it was the basis of the East Asian miracle. The East Asian miracle has not been so miraculous lately, and South Asian development has been miraculous. So things change, but back at that time, I'd say the difference in economic performance was due to both culture and economic approach . ZENNI: As part of that year's Bank reorganization in '87 under President Conable, you were promoted to Director, Population and Human Resource (PHR). Please discuss the circumstances leading to your promotion in taking on a sector director position, and whether this was as a result of the reorganization. HAMIL TON: You will not be surprised to hear that the job that I wanted was the job that was given to Bilsel Alisbah as India Country Director. In '87, I wanted to be a country program director because that was where all the act io n was, and especially India, but any other good country would have done the trick. Instead, I got an area that I knew very little about, the social sectors. I did know and had worked well with both David Hopper, who was the senior v ice president, and V. [Visvanathan] Rajagopalan, who was vice president in charge of the five sector departments. Hopper had five sector departments under Rajagopalan and the Economics Dep a rtment under Ben King for a whi le and then various other chief economists of the Bank. So both of those guys w ere friends and longstanding colleagues of mine , and I got the job, I think, 98 percent because I was a woman and they felt they needed a woman. All the other sector director positions were filled, all by men , not surprisingly. It's the social sectors where women ha ve traditionally worked; yo u know , they're the women's sectors. So that was where they thought to put a woman, and there I was , a woman . I actually had a good friend who was working as an assistant, sort of, to Hopper, and she said to me one day, "David has asked me to find a Third World woman for that job." ZENNI: For th e PHR Director job ? Ann 0. Hamilton April] 0, 2006 - Final Edited 19 HAMIL TON: Yes. And about three days later, I confessed to her: "I want you to know I am your Third World woman." So, alas, they could not find the Third World woman, so they had to settle for a first or second world woman. ZENNI: And was this as a result of the reorganization? HAMILTON: Absolutely. ZENNI: Okay . What were your main responsibilities, and how did your previous country focus experience in Asia help you tackle the challenges in dealing with the social sectors? HAMILTON: Again, to answer the second half first, I don 't think my previous country experience helped much at all. My previous management experience helped. My previous experience in the Bank , in general, helped , knowing who was who and what was where. But the fields were so different and the approaches were so different. My responsibilities in those days were health, education, population, nutrition, women in development, and poverty--poverty measurement, LSMS [Living Standards Measurement Study], the microeconomic analytical unit. There were four divisions in that department of which I was head. I had no expertise in any of those fields; any of the fields that I just mentioned. What I was able to do was (a) to gossip very widely about people, and thereby pick first-rate division chiefs for the most part; I really got good people to run those divisions; and (b) to empower them. Now, here was a case, quite the opposite of what I was talking about in the India Division when I became division chief, here was a case where I could not do the hands-on work directly. But what I could do was help the people who were doing it and help them get their papers through and help them achieve their objectives. For example, one of the more interesting papers we did was the Bank's first policy paper on tobacco. It was very controversial bec a use the United States, of course, was very tobacco-oriented and was ver y opposed to any policy that said we won't lend for tobacco . And then there were tobacco- growing countries that really needed the income. The farmers needed the income from tobacco. The paper said no, the y just have to find something e Ise to grow rather than murder. ZENNI: Was this based on health reasons at the time? HAMILTON: Yes, health and the economic consequences of ill health. I t was prepared by Howard Barnum in the Health Division, and we fou g ht it through , with a lot of help from Ernie Stern. He was for us and stood up to the U.S. , which was very hard. We fought through a paper on the health consequen c es of Ann 0. Hamilton April 10, 2006 - Final Edited 20 tobacco that said the Bank is not going to lend for tobacco growing or processing, ever. And God knows I couldn't have written that paper, but what I could do was help that division make it happen, get it through. So that's what I was good at, and it has always amused me that I was made the director of that department. It was then split into two departments with a vice president over it, Armeane Choksi . ZENNI: Later on? HAMIL TON: Later, when I left, right. And then when Jean-Louis Sarbi b arrived, it was made a senior vice presidency. I'd like to think that the job I did as a woman director was given, unchanged, to a male vice-president and then senior vice-president. ZENNI: The Human Development Network . HAMILTON: Yes. My nice directorship has become very, very important. don't think it has changed much. I just think the Bank has changed and the way it works has changed. But there's another thing that might have contributed to the way the situation developed. Maybe I dismissed my country experience too readily, because what we were able to do was set up Bank-wide working groups. We had enough contacts, and we were interested enough to relate to the regions, to respect what the regions were doing, and set up working groups in health and in education. And that became a model for the way the whole thing is done now. ZENNI: The way it evolved? HAMIL TON: Right. I mean, what are today networks, we started them , a nd it was not irrelevant that that was the way I had learned to work in the Bank and that I did know an awful lot of people in an awful lot of regions. ZENNI: Well, how would you describe, based on yo ur exper ience at that tim e, the adequacy of the Bank's approach to the social sectors and their centrality to poverty reduction? HAMILTON: It was just then they were becoming important. ZENNI: Was there a lot of focus on building national capacity at the time ? HAMILTON: Well, those guys at the center were very academic in th ei r approach; it was like a little university there . We spent an awful lot of time at meetings, at international me e tings, international conferences, discussing what the latest trends in elementary education or in labor force development or in nutrition were. We were the technical expertise that was generated and shared at these meetings and th en was kind of fanned out to the re gi ons . It was the Ann 0. Hamilton April] 0, 2006 - Final Edited 21 regions who were responsible for developing country capacity, and we saw as our job making them realize how important this stuff was and then developing the country capacity. So we were two or three steps removed from building country capacity, but it was certainly, in those early days, an important part of our objectives. And then, of course, the priorities themselves shifted. I mean, for a while there, women in development was a huge growth industry, and I think it may have remained that. Population was a huge growth industry and has virtually disappeared . Nutrition was a huge growth industry and has virtually disappeared. One of the things that happened was Richard Feachem, who was brought in as Health Director- I think that was his position-he was extremely effective and strong-minded and powerful. And what used to be the PHN, Population, Health . and Nutrition Division, or Department, in that order, went into alphabetical order, Health, Nutrition and Population. And health was primary and the other two became the poor Cinderella sectors for a while. They may be coming back now, but they shrank a lot for a while. ZENNI: But during your time, it was PHR? HAMILTON: The whole department was PHR. The division was PHN . Women in Development, I think, has stayed, and Education has stayed important, with I'm not sure what impact nor if it is very measurable. The Poverty unit has moved out. ZENNI: Please discuss your contribution to the issues of women in development. And how would you assess the effectiveness of Bank efforts in mainstreaming gender issues in poverty reduction strategies at that time? HAMILTON: When I took over that job, I inherited Barbara Herz. There was a tiny Women in Development (WID) unit somewhere and it was pulled into this PHR department, and Barbara came along with it as division chief. Barbara was extremely effective in promoting women's issues, and she had two great allies in this whom she carefully cultivated, and made it work. The first was Charlotte Conable, Barber Conable's. wife, whom she befriended, and used her actively to have women's issues raised all the time, in every single context. And when Barber Conable spoke, people listened . She tried again with Patsy Preston, but Mrs. Preston was not quite as engaged as Mrs . Conable, who was a major ally. And the other person that was her big ally was Larry [Lawrence H.] Summers , and he made a really seminal speech on girls' education in Pakistan. I can't even remember where he made it, but I know that Barbara and her whole team worked on it for months because Larry wanted it. ZENNI: When he was the Chief Economist at the time? Ann 0. Hamilton April] 0, 2006- Final Edited 22 HAMIL TON: Yes. And the speech set the audience and the world on its ears. So what I could do was give Barbara free rein, empower her, support her, and let her run around driving people crazy pushing gender issues, and it worked. ZENNI: Still on the subject of women in development, how would you assess the effectiveness of Bank efforts in mainstreaming gender issues in povert y reduction strategies at that time? And we are talking about the late '80s . HAMILTON: Well, 1 would certainly say it was very effective. I'm not sure how much credit the Bank gets, but they certainly get some . I think the pendulum was swinging then, as it had swung in this country maybe a decade earlier. Schools were beginning to recognize that admitting women was advantageous. The glass ceiling was being broken, exactly like when David Hopper appointed me because I was a woman. You know, diversity was becoming important, and in those days that meant gender diversity to a very large degree. It was happening increasingly all over the world (a) for poli t ically correct reasons and (b) for substantive reasons, as in Larry Summers' speech. I mean, 50 percent of the population is women . They are hugely important to the economy. Making them more productive and effective makes a huge difference. And that was the message that Barbara Herz was selling to anybod y that would · listen. Countries were ready to listen; governments were ready to listen . Larry Summers was a wonderful advocate. So what with one thing and another, it was happening for many reasons, but the Bank was part of those reasons. I mean, Preston or Conable, I forget which one, and probably both, even went too far sometimes, requiring a paragraph in every appraisal report about the role of women. Well, maybe you had to bend over backwards in order to get it integrated. ZENNI: Mainstreamed? HAMILTON: Mainstreamed , yes, exactly. So, yes , the Bank made a difference. The Bank was not single- handedly the source of the chan g e, but definitely a part of the change. ZENNI: And that impacted your work and your contribution? HAMILTON: Well, as 1 say, our job was simply to lean on the regions to incorporate this in the policy dialogue. My work was simpl y to empower m y own advocates to go out there and advocate and to support them and to facilitate their work. ZENNI: More generally , what, in your view, has proved most effective in helping g ive women a voice in society and in empowerin g th e ir ro le in th e development process? Ann 0. Hamilton April] 0, 2006 - Final Edited 23 HAMILTON: Well, the most obvious answer to me is education. Girls' education is of huge and overwhelming importance, the most important single thing, but it's not the only thing. Going way back, I remember in India when they had a tube well for drinking water in the village. If the tube well broke, there was no water for the whole village. You called the water authority and within a week or two somebody would come to fix the tube well. But in the meanwhile, the whole village was without water and women had to walk miles to get water from a polluted stream and carry it home on their heads. Then somebody started a program--not the World Bank--in which village women were given a bicycle and trained in how to repair a tube well; a very simple mechanism, three moving parts or something. They took these young women from the village and gave them each a bicycle and a tool kit and a training program. These women who had never left their own village because they had no way to go, they had no reason to go, suddenly became hugely empowered. They had a job to do. If the tube well broke, you radioed them and they were there within an hour and the tube well was fixed. Each woman worked in maybe a 10-mile radius, which was I 0 miles further than she had ever been in her life, peddling up on a bicycle. Those women were so proud and so happy. They were not educated, but they were given a job to do and they did it beautifully. So it is education above all, because that affects not only the women but the children of the women, the next generation. It's your multiplier effect beyond measure. In addition, there is a growing realization that women can be useful, effective and productive. So it's society plus education. And the education thing has for sure caught on. Now women are being educated to a much higher degree. ZENNI: Moving on to NGOs [non-governmental organizations], based on your experience what is your assessment of the burgeoning number of NGOs at that time and their increasing engagement in the development process, especially, in the social and rural sectors, and what was your contribution to Bank-NGO dialogue? HAMILTON: That also happened in two parts, and I won't talk about the second part which happened later, on my return to South Asia. There are two kinds of NGOs. One are those small groups that are trying to do good in- country, as distinct from international NGOs who are trying to do good on a larger scale, or at least to make a name for themselves. The small ones come in two forms themselves, good ones and bad ones, and the biggest challenge is distinguishing between those that are effective and good and those that aren't. The more we worked with them, the better we understood the difference. It's one thing when the Bank is working in infrastructure and you're talking to the railway authority or the highway authority or the fertili z er company; that's an easy form of dialogue. But if you're trying to deal with Ann 0. Hamilton April 10, 2006 - Final Edited 24 social change, you can't do it from here and you can't even do it from the capital city of the country, so we need those NGOs very, very much. They're the ones in the villages who know what's going on and who know what's needed and who know what makes a difference. Most of our choices were good. That's partly because most of the NGOs that had the sense to start a dialogue with the World Bank were already fairly sophisticated and knew what they were doing. And there are an awful lot of people out there in the private sector in any donor country who know the NGO world, and we learned how to work with them. So the answer is they played an evermore important role. We also took great advantage of a grants program--which later, after my time, the Bank discovered was run in a helter-skelter way, no standards, no control, no nothing-under which you could write a little proposal and get grant money from wherever it sat in the Bank and give it to a promising NGO. And we were way ahead of that curve. We discovered this money early and gave lots of money--not big grants, just small ones--to lots of outfits to whom $50,000 is a fortune; it's their whole annual budget. And we learned how to use that money well before the Bank discovered we were doing it in a sort of informal way. It reminds me of when Wolfensohn used to meet somebod y he liked on his travels and he would give them money from his own private foundation. Well, this was our own private foundation. We gave a lot of key seed money to NGOs, and we worked closely with them, and usefully. ZENNI: You've already spoken about institutional reform, but I'd like to ask you spec i fica! I y, in your view, what impact did the '87 reorganization have on the institution in terms of staff morale, goals achieved, and long-term impact on Bank strategy and objectives? And, what, in your opinion, should be the main drivers for undertaking periodic institutional reforms? HAMIL TON: The '87 one was done by Conable, wasn't it? ZENNI: Yes. HAMILTON: Well, I've made clear my impatience with very broad-scale, across-the-board reorganization almost for its own sak e, for the ego gratification of the president who can then prove that he has made a change, coming in and doin g things be tter. The '87 one I always be lieved had one hidden primary agenda, which was to de-fang Ernie Stern, to disempower him; he was g etting to be too important. He was the Bank; he was running the Bank. But a Bank-wide reorganization is a hugely disruptive way to deal with one p e rson. It wasn't an explicit obj e ctiv e , but it c e rtainly was a key part of th e ag enda. It didn't work, of course , because he was effective enough that no matter what position he was in, he was going to run the Bank as long as he was he re . It ·would hav e be en easi e r to ask him to le av e th a n to reorgani ze th e whol e Bank around him. Ann 0. Hamilton . Apri/10, 2006 - Final Edited 25 In a funny way, setting up the center was a lot like going way back to the '72 reorganization, or whenever the Programs and Projects Departments were combined in the regions. The center was similar to the old Projects Department , but it wasn't regionally organized or country-focused. In sum, the reorganization was disruptive, and it cheapened the currency by promoting everybody. All of a sudden there were 35 vice presidents. Back in the olden days, you know, it was an honored title. I'm sure the country focus element of it in the regions was important and valuable. There always are important and valuable parts of any reorganization. It's just that the reorganizations become so much bigger than they need to be (a) because once you start this snowball rolling down the hill, it gets very big by the time it reaches the bottom; and (b) because of the ego implications for both the president and the task force that he set up to do it. I'm all for incrementalism. But nobody has asked me how to reorganize the Bank. So I think '87 was just another example of losing a year and then Bank staff figure out how to do their work again. It's the same old pattern; you stir it up and it settles back down. ZENNI: What, in your opinion, should be the main drivers for undertaking periodic institutional reforms? HAMILTON: Well, first of all, you have to find a problem. If you have a problem, you address it. That's the easy way of doing a reform. But you do not need to bring the entire Bank into the process, to turn it upside down to solve one or two problems. If things aren't going well in country X, we should decentralize there by all means, but that doesn't mean you have to decentralize everywhere . Or if you need to deal with a few vice presidents who aren't being as effective as you'd like, you don't need to make them managing directors and appoint new vice presidents in their place . You need to deal with those individuals in a highly individualized way. So, one driver is problem-solving; another is that from time to time some change is probably healthy. It's very disruptive, but it's probably healthy. Still, it should be moderate, not just change for its own sake . So there's something to be said for change, and there's something to be said for discussion of change, too. I mean , I do not mind a bunch of focus groups on how does your unit work and how could it work better, but I don't agree with doing it by setting up a task force , which is again nothing but a group of individuals brin g ing their own individual biases and exp e riences, and all of a sudden it is a zillion-dollar thing. I also sometimes think it 's just to keep that moving company in business as we reorganize and every body has to move offices. But on the whole, I've never met a reorgani z ation that I liked. ZENNI: In January of '93 , you returned to the South Asia Region as Director, C ountry Department I, and you can te ll us specifically wh a t countries th at represented. What prompted your return to a country focus, and what were the main areas you focused on in tackling the ov e rwhelming ch a llenges of a region Ann 0. Hamilton April] 0, 2006 - Final Edited 26 that is home to the largest number of the world's poor, most of whom are women? HAMIL TON: The reason I left was because my job was given away. Wasn't there another reorganization? ZENNI: Are we talking perhaps about the fine-tuning exercise/mini reorganization in Octoter'92 where the VP, Sector & Operations Policy, was replaced with three new vice presidencies along thematic lines: Human Resources Development and Operations Policy (Armeane Choksi); Finance and Private Sector Development (Jean-Francois Rischard); and Environmentally Sustainable Development (Ismail Serageldin)? HAMIL TON: All I remember is I was on vacation in Turkey when I got a phone call. ZENNI: Was it '92, because you moved in January of '93? HAMIL TON: Then yes, it would be summer/fall of '92. I got a phone call from my office saying, "Uh-oh, your job has been abolished; it has been transformed into two jobs and all sorts of things have happened, so come home and see what's going on." Armeane Choksi was made vice president for whatever it was called, but PHR is the way I still think about it. At that point, I was talking to him about remaining a director of half of my former empire, either the education half or the health half. To be handling only half of it -would have been quite a come- down since I'd been handling it all, but that was okay. That would have been an acceptable job, but I also began exploring what was available in country departments, and the most promising vacancy was in South Asia, since Jochen Kraske had just been selected to be Bank Historian. I knew his job was becoming vacant, and I approached Joe [D. Joseph] Wood about it and ultimately got it. So it was a mixture of basically being pushed out, gently squeezed out by are- organization, not wanting to have a job that was half of my former job, and the pull of my old stomping ground in country operations. And I loved South Asia, even though the countries involved were the smaller ones--Bangladesh, Nepal and Bhutan. Bangladesh and Nepal are, of course, like African countries in terms of their poverty. They are small, poor, developmentally-challenged countries, and Bhutan was just a little gem that sat up there in the mountains and did its own thing. So it was indeed challenging . And, of course, when you come into countries that you don't know, it takes a good year to establish the relationships, to learn the issues, to discuss the projects. There were res reps in Ann 0. Hamilton April 10, 2006 - Final Edited 27 both countries who had been there for a while and who were very helpful in showing me the ropes and getting me up to speed, but it tooka lot of learning. Once again, I had a very good staff who had been there for the most part longer than I had, and I was very proud of the appointments I made during that period because I brought an awful lot of very good people into the department which also made a very big difference. Bangladesh turned out to be, for me, a huge surprise. It was a very smart and effective government that nobody appreciated much, including me. It is the home of the Grameen Bank, and it was the home of the best educational experiment going on probably in the world. The smart and wise Bangladeshis were right on the cutting edge of everything, and they were willing to try things and they were cooperative. So it was great fun to work on Bangladesh and to learn about it. For most of the time that I worked on Nepal, the big issue was the Arun hydroelectric project, which was a very separate issue, but ZENNI: We'll come back to that later. HAMIL TON: Okay. On the whole, once again the countries were doing it, not the Bank. Bangladesh was educating girls, was setting up micro enterprises; it was the model for the world in these fields. So it was pretty exciting just to get to know them. In fact, once again, the Grameen Bank and its leadership didn't want us involved. It was like oil in India--they were doing just fine, thank you- -and a lot of donors who came in with a much lighter touch than the World Bank were supporting them. They didn't particularly want the World Bank in their business , but we wanted in really bad, and so gradually we made a marriage. They still kept us pretty much at arms length because they didn't want us telling them what to do. They knew how to do it and they didn't want us improving their modus operandi. Those were fun countries to discover as I did. ZENNI: As country director, how instrumental, in yo ur view, is effective coordination and collaboration with the regional banks--in your case, it would be the Asian Development Bank--how would yo u describe the Bank's efforts, in general, and what was your contribution? HAMILTON: I think it' s very important that we cooperate with them. The conventional wisdom in my day with all the regional banks, but certainly the Asian Development Bank, which is one of the best, is that they were really stupid and we were reall y smart. Our job was to keep them out so we could go in and save the day because if they did it, th ey' d do it wrong. ZENNI: No partnering with them? Ann 0. Hamilton April] 0, 2006 - Final Edited 28 HAMIL TON: Not enough, not nearly enough, but gradually we began to communicate better with them, and to accept them. I was really quite merciless with my own staff, who said we've got to keep them out of the education business in Bangladesh because we're doing it better. I said no, you have to bring them in and work with them. It was very hard because it required a culture shift inside the Bank. The Bank wants to be--I'd better not speak in the present tense because I'm really too out of touch--wanted to be, in my entire experience, numero uno in everything, everywhere, all the time. We were better and therefore we should do it all. They never learned about comparative advantage. And it required a lot of, as I say, culture change to persuade the staff to cooperate. Now, it also happened--in Bangladesh, in particular--that we undertook some very good in- country coordination exercises which also helped improve communications and partnering, but it was not the done thing. And that's the lesson I would take home: let the regional banks and other donors do and get good at what they're best at, let them have some piece of the action, leadership. Let the ADB, for example, have the lead in the power sector or the education sector. ZENNI: Yes, recognize the expertise of others. HAMILTON: And we can work with them. Instead of just competition, it should be cooperation. But that was not always the case. I hope it has gotten better. ZENNI: I think it has to some extent. HAMILTON: We had one Bank staff member, a Japanese woman, who had gone to the Asian Development Bank on a temporary assignment. I can't remember her name, but she was there and that made dialogue a lot easier. She was like a department director at the Asian Development Bank. I never knew her well, but the staff found her easy to work with because she was one of us and therefore had to be okay. ZENNI: Sometime in '93, you served as Chairman of the Appeals Committee. Do you care to discuss how this came about? HAMIL TON: I had been a member of the Appeals Committee for several years. ZENNI: Prior to .. HAMILTON: '93 . I don't remember when I joined, but I had been a member for three or four years before I became Chair. Bilsel Alisbah, who had been Chair of the Appeals Committee, moved from his job as India Country Director Ann 0. Hamilton Aprill 0, 2006 - Final Edited 29 to the head of Personnel. It was obviously impossible for the head of the Personnel Department to be on the Appeals Committee as well, since that would be the ultimate self-dealing. So he arranged--! think it was pretty much wi thin his power--he made me Chairman, or he told them to make me Ch ai rman , w hich is how it happened. It was his promotion that made it happen . I remember saying, "Bilsel, when I told you I wanted your job , I didn't m ean you r job o n the Appeals Committee, I meant your job as head of the . India Department. " But I got the Appeals Committee job instead. Once again , I ha v e not followed w hat has happened to the Appeals Committee or how it has evolved, but it was an extremely interesting position and situation. And once again, in 90 percent of the cases that we got, all we had to do was listen to the appellant, because the problem was they felt aggrieved and nobody had ever listened to their side of the story. Even when we decided against them, they were, as a rule , grateful and relieved that somebody had just spent a whole day or sometimes two days listening to what they thought was wrong and was ha v ing a dialogue with them about it. And it was just very humanitarian. One of the things it taught me was how non-humanitarian so many of the Bank's personnel decisions are. You just say, "We're sorry, you're not performing well, you're going to get no r a ise this year or ever again," or " You're going to be gi v en a more menial job, end of story." There has been no, as I say, discussion, no listening . Most people are so glad to just have somebody hear what they' ve got to sa y about something and care about what they've got to say about something. I couldn't give you a tally of how many of the Appeals Committee's recommendations were in support of the Bank's position and how many in support of the appellant's position and, when in support of the appellant's position , how many times did the Bank take its advice, because it's only advisory. I found it a really enlightening, interestin g and fun job to do. It was hard work but it was well worth it. ZENNI: Is there value-added in having such a mechanism for the institution ? You've spoken of the va lue in terms of the staff hav in g someone to l ist en to their grievances , but for the Bank, does the Bank itself benefit from ha v ing such a mechanism in terms of learning from it? HAMIL TON: Maybe yes and maybe no. The Bank benefits becau se if yo u listen to people and let them ventilate and walk away, feeling at least a little better about their situation, the y 're much less likely to be disruptive, litigious, difficult, trouble-makers or whatever. So, yes, it's certainly worth it from t h at point of view. Do es it c han ge the Bank's modus operandi? ·I think that's highly personal. If you've got a grumpy martinet of a boss , then he's going to make a staff member unhappy. And if the staff memb e r appeals to his boss, who is gr umpy and busy and doesn't have time to list e n to whiners , th e problem is not going to be solved. If you have a nice guy lik e Bilsel Alisbah as Director of Personnel , he's going to list e n to both sid es of the story . If you don't h ave a Ann 0. Hamilton April] 0, 2006- Final Edited 30 nice guy as Director of Personnel, he's going to be imperious. So it's not the Bank learning from the Appeals Committee, it's the Bank learning about what individuals to appoint as managers. ZENNI: So there were some lessons learned from some of these deliberations? HAMIL TON: We didn't try to draw broad conclusions. There was a secretariat that did an annual report, but I'm not sure it tried to come up with major lessons. It would be really interesting to have an evaluation of the Appeals Committee and its impact on the Institution as well as on individual cases. I don't even know what the appeals structure is now. In those days, it was the Appeals Committee and whatever the . ZENNI: Tribunal. HAMILTON: Yes, exactly. We were advisory and they were mandatory. But they listened to us, which was very, very helpful. And most of our cases--at least most of my cases, I'm happy to say--did not go fo" rward to the Tribuna I. The staff member either left happy or at least recognized that they didn't have a chance because we had really tried hard to listen to their point of vi ew and found it unconvincing . Then, of course, there was the Ombudsman, which is another place where people listen. ZENNI: Yes, exactly. There are many areas where staff have recourse in the Bank, I have to say. HAMIL TON: Yes, and I think it's worth it for sure, because if you bottle it up, it just spills out somewhere else. ZENNI: Now we can discuss your involvement on the Arun III Hydroelectric Project, including the reasons why you think this project ended up being investigated by the n ewly-established Inspection Panel in '94- it was the Panel's first project--resulting in the Bank's eventual withdrawal from the project in '95. HAMIL TON: That was surely one of the worst chapters of my Bank experience. When I joined the Bangladesh-Nepal-Bhutan department, there were two projects in the pipeline--one was the Jamuna Bridge in Bangladesh, and one was the Arun III project in Nepa--that were attracting a great de a l of ne ga ti ve attention. The detractors were mostl y staff inside the department, mostl y the social sector people who could not bear the idea of having these huge sums of money spent on big infrastructure projects. That was the zenith of t he social sectors and th e nadir of infrastructure projects, and these were both very bi g infrastructure projects. Ann 0. Hamilton April 10, 2006 - Final Edited 31 The Jamuna Bridge project went forward in spite of an enormous amount of carping from all over the place, all over the Bank. But we fought our way to the Board and it went through, and it has been, I'm told, one of the most successful projects in the history of Bangladesh. It crosses the Jamuna River, which is a huge river, and it has vastly facilitated transport; truck drivers can now go in a day someplace, whereas it took them ten days before because they had to drive all the way around. It was important and it was technically challenging and it was a great success. I made it clear earlier that I'm a believer in infrastructure projects, and this was a successful one. · ZENNI: What year are we talking about? HAMIL TON: Well, one of the very few years that I was in that department, so it probably went forward in '94, I guess. ZENNI: Okay. HAMIL TON: On Arun, your question suggests that the project did not achieve its objectives. The project was never done . It never went forward. My explanation for that goes back to the infamous Narmada project in India, in which several international NGOs became very excited about the number of people that would be displaced by building this large dam to irrigate a large area. And to their own amazement and mine and the Bank's, they prevailed . It became so controversial that the Bank finally said to the government of India, "Please withdraw this project. You can find funding elsewhere. We will help you find funding elsewhere. It's a good project, but we can't afford to do it." And the NGOs were simply delighted and surprised, as I say, that they had managed to actually stop a Bank project. I don't think they expected success, but they got it. And so then they looked around the world to see what they could oppose next , since this was fun, parading and demonstrating in Washington and having meetings and all that. Well, right next door was the Arun Hydroelectric Project, so all the big, noisy international NGOs focused on that project. Then we also had inside the department a guy, Martin Karcher, who was Division Chief for the social sectors, the Population, Health and Nutrition Division inside the department. He. became a one-m a n crusader against the project , and he aroused a lot of interest. Thousands of questions were raised, which was helpful. Thousands of qu e stions were answered to my complete satisfaction. In fact, it was a good process because the project was very dicey. This was a big and tricky project in a small and institutionally weak country, but it was so important. It would have made such a difference to the future of Nepal that I wa s very anxious to have it done. We all knew that it was very, very high-risk, and we did everything in our power to analyze things, to set up safeguards. We Ann 0. Hamilton April] 0, 2006 - Final Edited 32 did everything we knew how to increase the chances of success of the project. I had several very good meetings with the Inspection Panel members. We had a good dialogue going. Sometime in there, the following things happened. One, the NGOs were so very busy. They were helped by the fact that Martin Karcher retired from the Bank, having reached the rule of 85 or whatever, but he did it with a huge fanfare saying that he was resigning over the Arun project, which really infuriated me because it was not true. It was a standard retirement at the standard time, but he made a lot of noise about linking it to Arun. Two, Ernie Stern left, and he was one of the people, like with the tobacco paper that I mentioned earlier, who was prepared to stand up to pressure if he thought it was the right thing to do. With Ernie up top and me down below, we kept the pressure on Joe Wood, the vice president, who was for the project but was a little scared. It was being attacked from all sides. Ernie left, and not very long after that, I left. The third thing that happened was that Jim Wolfensohn, who wanted to be everybody's best friend, especially the NGOs ' best friend, came in. Without Ernie and without me, he and Joe Wood dropped the project. ZENNI: Wolfensohn came in June of '95. HAMIL TON: The project was dropped sometime early in his tenure, probably later in '95. HAMILTON: In '94 the Inspection Panel came out with a report that asked for a lot of additional work . It didn't damn the project. It just said there are a lot of risks here and you've got to be very , very careful. So we did more work. We just kept working and working. That project took a hundred perc ent of my time for a year because I thought it was important. But by late '95, when Wolfensohn pulled the plug on it, I had left , Ernie had left , the NGOs were on the warpath , th e Inspection Panel report was not good. Everything conspired to scuttle the project. ZENNI: Overall, the findings seem to indicate that IDA management's overall performance was deficient , there was non-compliance with its own operational directives. HAMILTON: I don't think so. As I recall , this was all about whether the gove rnment of Nepal could actually implement something this complicated and . with this much social sensitivity. They were messing with the high Himalayas up there. It was not about our operational directives ; it was about: what we re the odds that th e government of Nepal would implement the project the way we said they were going to? Ann 0. Hamilton April 10, 2006 - Final Edited 33 ZENNI: How crucial was the staff appraisal report in this context, based on your extensive experience in doing appraisals? HAMILTON: It was as good as it could be. We had done everything possible . It was excellent, but it didn't carry the day. We said, "There's a risk here; here's how we're handling it. There's a risk there, here's how we're handling it." And it just wasn't good enough for all those people who say, "You can't handle those risks; the government of Nepal is not competent." Now, the reason I mentioned the Jamuna Bridge is because they said the same thing, and yet it was a great success. And I am convinced to this day that had we gone ahead with the Arun project, it would have made a huge difference in Nepal's economic development. ZENNI: In your view, what should be the lessons learned for the Bank in its approach to building large hydroelectric dams which have been, for the most part, such highly controversial undertakings for the Bank? HAMILTON: Well, you either say it's not worth it; they take so much time and energy because of the controversy that we just won't do large hydroelectric projects . Large hydroelectric projects (a) are technically complicated and challenging and (b) involve moving people, and moving people is difficult and challenging. And that's where the controversy comes in, largely. So either you run away and let others finance the projects, or you stay in the game. ZENNI: What does that say about the Bank's resettlement policies? HAMILTON: I'm not sure what they are today. In my day, especially in Indonesia, there were huge resettlement projects that we were financing. They're complica~ed, you know, but something like them needs to be done in the name of development and of progress. I'm reminded for no particular reason of the controversy going on in this country now about immigration policy and immigration laws. That's people moving around and adjusting to a new society and a new way of life. Of course, it's not happy-making for anybody, but it's a problem that has to be addressed one way or the other. Either you build a fe nce or you make immigration work. In that sense it is like a hydroelectric project. Either you do the best you can in a com pi ica ted and difficult situation, or yo u say, "Well, let somebody else do that. It is perfect for the Asian Development Bank, don't you think?" "No, because they don't want it either." So what do you do about hydroelectric projects ? I don't know the answer. I myself would fight because I'm a fighter. I like a good fi g ht, but the rug was pulled out from under me after my departure. It was one of the saddest days of my life when we walked away, when Wolfensohn and Joe Wood decided to drop the Arun III project. I'm not even sure when it was. Ann 0. Hamilton April 10, 2006- Final Edited 34 ZENNI: It was in August '95 that the Bank withdrew from the project. We turn now to discussing the institutional reforms that took place within the Asia Department around this time, mainly, the consolidation of three country departments into two. In your view, why were these reforms institutionally necessary, and how did they affect you professionally? HAMILTON: They affected me pretty profoundly. I think they were not necessary. I think they were wrong. I think they were a mistake. ZENNI: What do you think drove this? HAMIL TON: Joe Wood, the vice president, did it on his own. My own view is that it was at least partly because he thought that's what Shahid Husain wanted, although he swore that Shahid 's views did not motivate him. ZENNI: Shahid Husain at that time was VP of Personnel? HAMILTON: Yes. And he thought that's what Jim Wolfensohn would want. think Shahid was playing the Wolfensohn card pretty hard. ZENNI: We're still in late '94 here. HAMILTON: Yes, but Wolfensohn, I think, was already a factor, long before he actually took office. I think Shahid, for sure, was part of Joe's motivation. And I think part of it was I made him very anxious and very nervous. ZENNI: Made Joe Wood? HAMILTON: Yes . He did not know how to handle an outspoken woman very well. A third factor -- and least important in my thinking--was, I believe, Joe actually thought for some crazy reason that it would be more efficient. The workload of these departments was erratic. Sometimes there was a lot of lending and sometimes there was a lot less. Obviously, if you combine more countries together you get more diversification and more evenness of lending, and he thought that was a value to be achieved. I argued that he shouldn't take the poor country department, namely Bangladesh and Nepal, and combine it with the big, successful or quasi-successful countries, the giant countries , namely India and Pakistan. I also pointed out to Joe, when arguing against this, that he is destroying his own future because a two-department vice presidency isn't enough critical mass to keep him in business, that no matter what Shahid thinks he should keep three departments. The other two directors argued the same thing, but he was Ann 0. Hamilton April 10, 2006 - Final Edited 35 determined. He abolished one department and that left, as I alwa ys put it, t hree frogs and two lily pads. It was a game of musical chairs in which they had taken away a chair. Now, there was never a moment's doubt in my mind about which directors were going to be kept on. There was never a moment's doubt that it was going to be me that ended up without a chair, because I knew he wasn't comfortable wi th me. I believe this was partly because I kept holding his feet to the fire on Arun and he didn't like having to take all this heat on Arun. But, anyway, there I was, out of a job , and that was, from my point of view, officially the end. It was right after the Madrid annual meeting in September'94 that he announced this change. I had a nice time in Madrid, good discussions with everybody, a classic, good annual meeting, but by October the bottom had fallen out of my world . That meant also this ghastly process of making sure that all your staff end up somewhere. A whole department's worth of staff had, in effect, lost their jobs. Where were they going to go? Which department were they going to go to? How did you persuade that department director to take this staff member w hom he didn't know and didn ' t want ? So what was going to happen to this poor guy hanging out there? None of that had, of course, been thought through. This is the kind of reorganization stuff that I think is terrible because it just was so horrible for morale. So in January'95 , I was made an adviser on governance. That was my portfolio. I knew nothing about it. I didn't want to know anything about it. I didn't care about it, and so I began looking around. I devoted all my time to looking for another job. It was Wilfried Thalwitz, bless his heart, who said, " Don't take another job. You will never have another chance like this at a severance package. Leave." So I devoted the next little while to (a) still looking for another job, but also (b) leaving and negotiating a severance package. ZENNI: Later, in January '96 , you moved as senior adviser to South Asia's Technical Department. HAMIL TON: I don't even rem e mb er that because that was part of m y departure. I wasn't coming in to work. I wasn't doing anything. ZENNI: Did you work on governance? HAMILTON: No. I gave it a half-hearted stab. But I remember that a former colleagu e who h a d b ee n mad e an adviser called m e up when this was announced , saying, "Welcome to AA , Advisers Anonymous. " As you know, to move f rom a real job to an adviser job was th e ultimat e ins u lt. ZE NNI: Okay. Moving on to the World Bank pres ide nts you served under, what is your assessment of the va rious presid e nts under whose leade rship y ou Ann 0. Hamilton April} 0, 2006 - Final Edited 36 served during your tenure at the Bank? And these would be McNamara, [Alden W.] Clausen, Conable, and [Lewis T.] Preston . HAMILTON: Well, of course, the World Bank party game is to complain about the president. So when McNamara was there, we complained bitterly. He was a control freak. He managed everything himself. We said, " Boy, we need a breath of fresh air in here." The minute he left and Clausen came in, every body was missing the good old days under McNamara. We had, as the conventional wisdom goes, three relatively weak presidents: Clausen, Conable, and Preston. They didn't make much of an impact. They all did those dumb reorganizations which did not bring any glory on any of them, even though they may think it did. And they let the Bank run itself for the most part, a thing that the Bank happens to be very good at doing. So the Bank was fine, and everybody growls now about ineffective presidents, but at the time they were gods. The president of the World Bank to the staff of the World Bank is king. I think it's partl y the internationalism of the institution, that people who come from hierarchical structures have great respect for the person at the top. You I i ved in awe of that guy even if you didn't respect or like him or you thought he was weak. I didn't have much of an opinion of those presidents. I traveled in India with Clausen on what I think was his only visit to India, and I found him just a real nice guy and that was all. And I'm sure I would have found, had I spent time, which I didn't, with either Barber Conable or Lew Preston , I would have found them real nice guys. For all of that era, in effect, Ernie Stern was acting president of the World Bank . There were a few very powerful guys who kept the Bank running , like Ernie and Moeen Qureshi. Since I happened to like both Ernie and Moeen, I was per fe ctly happy. I'm happy to say that I missed the next two presidents , both[James D.] Wolfensohn and [Paul D.] Wolfowitz . I mean, we had one strong president, three weak, and then at least one strong one. ZENNI: Wolfensohn? HAMILTON: Yes. But Wolfensohn just destroyed the Bank that I knew. He may have made it better, but it's a different Bank now, and I'm glad I was not here to watch the carnage. So I don't think strong is so good either. ZENNI: Well, in your opinion, what should be the criteria for selecting a good World Bank president in terms of both personal and professional leadership attributes? HAMIL TON: That's m y point, that y ou can't win , but certainly a balance is needed between personal and professional attributes. The person should know a lot about development or about international economic issues , which Wolfensohn did. So that's important. He should, above all, be se cu re enough to . Ann 0. Hamilton April] 0, 2006 - Final Edited 37 listen to others. That's a crucial personality trait, to hear and to listen and to be able to take criticism and to respect the phenomenal wealth of wisdom that exists in the World Bank and not denigrate it and not ignore it, but to listen to it, and to have the sense and the security to listen to it. The president should not be an egomaniac, if possible, but how does he get to this kind of job if he's not an egomaniac? So, personality issues are probably more important, but then somebody is going to say he's too controlling and somebody is going to say he's too weak. Take the last two presidents. I don't know either of them at all, and I'm speaking mainly second-hand. One was driven largely by insecurity and one may be driven by excessive security, and, as a result, neither one is a good listener. I think listening to the staff is the most important thing, and listening to contrary opinions is the most important thing any manager, right up to the top, could do. ZENNI: Okay. Turning now to reflections. As you look back on your tenure, as far as you can recall, where has the Bank been inost successful and where has it been least successful in adjusting itself to a changing world? HAMILTON: I 'm not sure I have followed closely enough to be able to answer that. The Bank has become much less central, much less relevant to the international deve I opmen t process. Private financing is now huge and trumps the Bank's loans. The big borrowers, the lndias, Brazils, Chinas and Indonesias of the world, don't need the Bank at all in the same way. They can do it in other ways; the shoe is on the other foot. I guess the Bank has done a reasonable job of accepting its changed role and its diminished, in the tradition a l sense , role . They haven't any choice. I mean, they have just had to face reality. The y 've certainly done a good job in promoting the social sectors. I think they're doing a good job in acknowledging again that infrastructure matters. I've known it all along, but they had to go through a period of not knowing it. Now they seem to be coming back to that eternal wisdom. The y 're still too institutionally egomaniacal. They still think that they have to be part of the solution to eve ry single problem. They have never been any good at eliminating initiatives. ZENNI: Selectivity? HAMILTON: Yes. And I see no evidence that the y' re any good at it no w . I think they are carrying the war on corruption too far. But on the whole, it is still an admirable institution that has an important role to play. Somebod y once said about the government of India, in th e old days , if the y pass a law and f ind out that the law doesn't work the way it was intended to, they pass another law to fix what was wrong with the first law and then the y pass a third law to fix what do esn't work. What they should do, of co urs e, is d ism an ti e the first I aw. Ann 0. Hami(ton April] 0, 2006- Final Edited 38 It's like the U.S. Income Tax Code. It just gets more and more and more a nd more and more complicated. They should start over and write it in one page. The World Bank should in some sense start over and pretend like it was established yesterday; have a virtual Bretton Woods and figure out what's needed. But they can't do that because they've got so much baggage in terms of staff and history and egos all over the place that they can't rethink themselves. And they've done a pretty good job of moving this barnacle-encrusted super tanker to keep up with changing times. It would be better if they would remake themselves as a fast little speed boat , but I don't think that's in the cards. ZENNI: Looking back, what have you learned from your experience at the Bank, and what has it meant to you personally serving as unique an institu t ion as the World Bank? HAMILTON: When I left the World Bank, I didn't know what to do with myself because I didn't leave happily or voluntarily . So I went to law school, where I had a terrific time, and I began thinking to myself, "By golly, I should have done this 35 years ago instead of going to the World Bank. I would have been a terrific lawyer and I would have had a lot of fun prac t icing law, and I chose the wrong career path." But the more I tried on that attitude, the more I thought, "No, I would not have given up by World Bank experience for any thin g in the world." It is the most fun, elite , and interesting group of people in any workplace in the world. The average is higher. The number of friends you can make or people that you want to keep up with or people that it's interesting to be with is unbeatable. The world travel is certainly a plus; being able to visit all kinds of countries and not just as an ordinary human bein g, but parachuting in as a demigod of some sort and being treated royally by the government and the resident mission is all very heady stuff. And , imagine, you get to do all that while convincing yourself that you're doing good for the world . After leaving, I've questioned more and more how much good I actually did for the world, since the world does not seem to have changed ve ry much in spite of all my efforts. In many, many ways it has gotten worse. But certainly, at least while you're doing it, while you're enjoying all the perks of World Bank-hood, you're feeling very righteous and very generous-spirited and very socially- minded. And, in fact, you are all those things. What a wonderful co.mbina t ion of being able to do well while doing good, or do good while doin g well. It's unbeatable and will remain unbeatable, and that's exactly why it will never change because everybody likes being here. ZENNI: Of your many contributions to the Bank's mission , what do you consider to be the most important? HAMIL TON: It would be a tie between whatever contribution I made as director of PHR and whatever contribution I made in the India Division. I think Ann 0. Hamilton April] 0, 2006 - Final Edited 39 we made a difference in getting the social sectors to become more important on the map and on the agenda. I think there has been a crucial and critical sea change that has taken place. So, on the one hand, it was maybe the five years of pushing sectors that were really important and that really did catch on. On the other, it may have been way back at the beginning. I think those infrastructure projects really did make a difference in a country as big and as important as India. And it might have been the Arun Hydroelectric Project, but alas, we never had a chance to find that out. ZENNI: Is there anything you still wish to talk about that I might have perhaps overlooked? HAMIL TON: No . I was thinking as I was talking that in my early days the World Bank depended a lot on mentoring, protectors, friends, connections, and people. And each person had his or her own network, people that they turned to in crisis . That was one of the things that resonated with me on the Appeals Committee and one of the things that always resonated with me in general. I always felt like I was some kind of Earth Mother. I mean, people came to me all the time with questions and problems and seeking advice. That s ystem, of course, was bad in that it involved a lot of cronyism, and people who had powerful friend s did better than people who didn't have powerful friends. And so there's a good side and a bad side to it. But of late it seems to me to have been largely lost because everybody is so scared and protecting themselves so thoroughly that they don't have the energy or the time or the inclination to adopt a new staff member and serve as a mentor to him or her. ZENNI: There's a survival culture? HAMILTON: Yes, exactly, precisely. And it's not generous-spirited anymore and it's not a bout mentors and it's not about becoming a dvisers and leaders so that new people come in and have an adviser and a mentor. It's about every man for himself, and that's a shame . I mean, you will notice in the course of thi s interview how many individuals I've mentioned, because that's the way it worked and that's how you did well and that's how you did badly. If you went to work for somebody who didn't like you , you were n't treated nicel y . But if you had friends in high places, you could get things done. And so both the good aspects a nd the bad aspects of th a t, I think, a re being increasingly lost. ZENNI: Is there a nything else you'd like to add ? HAMIL TON: I can't think of a thing. ZENNI: Okay. Well, thank you so very much for a wonderful contribution to the Bank's Oral History Progr a m. Ann 0. Hamilton Aprill 0, 2006 - Final Edited 40 HAMIL TON: Thank you very much. It's an interesting program and I wish you well. ZENNI: Thank you very much. lEnd of interview] Ann 0. Hamilton April] 0, 2006 - Final Edited