Thursday, March 27, 2008

Larry Summers time at the World Bank

Larry Summers from the same CFR event;

I did two things during that period of which I am rather proud, one thing that two thirds of people in this room are probably vaguely aware of. It wasn’t one of the two things I was proud of. I wrote a report that I think subsequently influenced the bank a fair amount on investing in girls’ education, and making the case that it had an enormously high rate of return. I guess I had an urge even then for generating a little bit of controversy. I chose to present this paper initially in Pakistan to the Pakistani Economic Roundtable. It was quite a remarkable event. There were people, sociologists sitting there saying, finally somebody from the World Bank saying something relevant, useful, not the old usual stuff about financial liberalization. But there was also, and I will never forget this, somebody standing up and saying: you know, sir, arguments like yours are the reason why America has 30 million latchkey children and is a sick society. But ultimately the thing had a fair effect. The other thing I did, more of less by serendipity, was I decided that the bank would write its annual report on health and on quantitative techniques for measuring which kind of health interventions were most effective. I could have been more thrilled to read three or four years later that Bill Gates, who at the time I had never met, said that it was reading that report that had led him to decide that global health was going to be the focus of his philanthropy. So one should remember that these kinds of reports can have an impact. I also signed my name to a memo where I tried to make the case that there is a complicated set of balances involved with free trade and economic growth and the comparative advantage that comes from it. A young man who is a good friend now who drafted the memo for me chose to express the thought that not every country should have the same environmental standards by saying, wouldn’t it really be better if more toxic waste was dumped in Africa . This was a rather unfortunate event. The guy from the bank’s press office would call me every two hours. Larry, they just denounced you in Aukland. They’re having an environmental conference in Cape Town and they’re going to pass a resolution about your memo.

‘Fearful Pig’ is resigning as the President
Paul Krugman once noted the late economist Dornbusch classified economists, depending on their research style; "Goldsmiths" were careful, meticulous workers - which Rudi admired. "Pigs" just sort of jumped into an issue and wallowed around. But that was OK too, if it was done with sufficient vigor and originality. Rudi described Larry Summers as a "fearful pig" - and it was a compliment.

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