79068




THE WORLD BANK GROUP ARCHIVES

     ORAL HISTORY PROGRAM




      Transcript of interview with

         FRANNIE A. LEAUTIER




          May 16 and 18, 2007
           Washington, D.C.

      Interview by: Marie T. Zenni
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                                      Session 1
                                    May 16, 2007
                                   Washington, D.C.

ZENNI: Good morning. I’m Marie Zenni, Senior Interviewer for the Bank’s Oral
History Program.

LEAUTIER: And I’m Frannie Leautier, former Vice President for the World Bank
Institute.

ZENNI: Okay. Today is Wednesday, May 16, 2007, and I’m here at World Bank
Headquarters to interview Ms. Leautier, who will be leaving the service of the Bank at
the end of this June, after having served in the last five-and-a-half years as VP [vice
president] for the World Bank Institute, to be referred to hereinafter throughout this
interview as WBI. Welcome, Ms. Leautier.

LEAUTIER: Thank you very much, Ms. Zenni.

ZENNI: I would like to begin by discussing your background in general, including your
educational background, and how you became interested in infrastructure development.

LEAUTIER: Well, I grew up in Tanzania. I was born in a small town called Moshi,
which is at the base of Mt. Kilimanjaro. And having shown a very early interest in
mechanical objects and physics, my parents encouraged me to exploit those interests, and
I ended up specializing in the sciences and math and then also in engineering and got my
first degree, a bachelor of science in engineering, from the University of Dar es Salaam.

I left the University of Dar es Salaam to come to school in the United States. I had
applied quite widely and was really leaning towards going for graduate education in the
U.K. or Australia, which is where most people from Tanzania went. And I was very
fortunate to go for a seminar that was offered at the University of Dar es Salaam by the
United States Information Agency at the time, and there was a scientist from NASA [U.S.
National Aeronautics and Space Administration] who came to talk about how he got
interested in science and what that led to.

I was very, very excited by his speech, went to talk to him afterwards, and it turned out
he had graduated from M.I.T. [Massachusetts Institute of Technology], so he encouraged
me to go to M.I.T. rather than any of the other schools that I had applied to. So that’s
how I ended up in the United States, doing my master’s and Ph.D. in engineering at
M.I.T.

And for my Ph.D., I focused on the subject that stretched between engineering and
economics, and that brought me into the field of development because I looked at the
decision-making environment for maintaining large-scale infrastructures and how


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economics and engineering come into play at those deficient levels. So, that’s really my
educational background in short.

ZENNI: All on account of coming to the U.S.?

LEAUTIER: Yes.

ZENNI: What in your pre-Bank experience led to your formally joining the World Bank
in September of ’92, and how did this exactly come about?

LEAUTIER: Well, I was born in a developing country. I come from a rather modest
family. I have grown up knowing what it means to be hungry and be able to struggle and
survive through that. So, when I came to the United States and I immediately noticed the
difference in wealth and income between the average American and the average
Tanzanian, I got quite interested in what makes that difference.

Also, in Tanzania for a bachelor’s degree graduate, every graduate, independent of the
field of study, has to take a course called Development Economics, so I was already
subjected to at least two years of learning in development economics.

I also got very interested in questions surrounding large-scale investments, which tend to
be very, very difficult for poor countries, and I was quite amazed at how the interstate
highway system in the United States, as vast as it was, takes such a small share of the
U.S. federal budget compared, for instance, to the very smaller highway network in
Tanzania that took a huge amount of the budget. So, the differences in wealth, the
differences in development, and the impact that the infrastructure had on that were
subjects that I was interested quite early on.

But coming to the World Bank was really almost a coincidence, because I was teaching at
M.I.T. after my graduation and a Director from the World Bank came to give a seminar
on what the World Bank’s thinking was on infrastructure for the 1990’s. I was occupied
and couldn’t attend the seminar at the beginning but was able to attend part of it, and I
asked a few questions. That Director found the questions quite interesting. He was later
told that I was teaching courses on infrastructure and came to talk to me afterwards, and
encouraged me to come and work with the World Bank.

I agreed at the time to spend some time as a consultant, so I came and worked during the
summer as a consultant on the strategy for the World Bank for infrastructure in 1990.
The work was very interesting to me, so I ended up actually joining the World Bank at
the time when a number of positions opened up in the department I was working in, and
ended up staying beyond the short-term consulting that I had at the time.

ZENNI: Okay, now moving onto your Bank tenure. You initially joined as an
economist in the Infrastructure Transport Division of the Latin America Region, where


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you remained for almost two years. Please discuss your main responsibilities, what were
the areas of your particular focus, and what did you set out to accomplish.

LEAUTIER: When I was hired into the Latin America Division, that unit was
responsible for infrastructure in several countries that included Peru, Venezuela, and
Brazil at the time. It got restructured after that to include different sets of countries, but
when I joined, those were the countries I was assigned to work on.

My very first assignment was to join a team that was evaluating the performance of the
Brazilian government in maintaining and upgrading the system of airports, so I went
along to Brasilia to meet with the Brazilians and to see what progress they had made, so it
was a supervision mission. But then I very quickly got asked to be responsible as the
Task Manager for the Infrastructure Strategy for Peru, because the person who was doing
that work at the time was leaving the Bank to go and work at the Central Bank of
Portugal. So, they were in a little bit of a short staffed situation, and they asked, given
my experience, that I could take on the task.

So, I had to improve my Spanish very quickly because all the interviews had to be done
in Spanish and most of the work and documents were in Spanish, and I had to go on
mission to meet with the Minister of Infrastructure at the time and the groups that were
working on the reforms in Peru.

Peru was an interesting country for the Bank at the time for two main reasons: because it
was just coming out of arrears, and therefore becoming a new, interesting client for the
Bank, given the time that the Bank had not been working there while the country was in
arrears, but also they were dealing with the Shining Path, Sendero Luminoso, which was
at the time when there were quite a few incidents and targets against aid workers. This
was also a security situation that was improving. And I think, for me, I was quite
fortunate to work in an environment that gave me a sense of what the World Bank was
created to do: to work in countries that were coming out of a conflict or out of a war or
maybe going into major reconstruction after a conflict, and I could have a sense of that in
my day, every day.

I also worked on the team as the Transport Economist for the Transport Team in the unit,
evaluating progress. And the most memorable task for me was a rural roads project in
Peru, again trying to define the economic analysis and come up with a methodology for
choosing whether to invest or not in upgrading the rural roads in this region of Peru near
Cusco and Ccorca, where most of the vegetables come from, and a very poor
mountainous region of Peru which had very poor roads at the time. And I also got to
work on the privatization of ports and airports and the infrastructure strategy in general
for Peru.

So those are the two most memorable things that I did while in Latin America, and I
worked on many other projects, but I think those are the two important ones that I


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remember.

ZENNI: Please discuss what impact, if any, did the recommendations of the November
’92 task force report--commonly known as the [Willi W. A.] Wapenhans Report
commissioned by the late Bank President Lewis Preston to examine the quality of the
Bank’s portfolio--have on your endeavors, if any?

LEAUTIER: When I came, people were really talking about the Wapenhans Report. I
very quickly got to read it and found out what the main findings were. And I think for
the period that I was a task manager in the LAC region, I saw three important impacts
that that report had.

One is the professionalization of supervision, because the Bank was not spending enough
time and effort on supervision. There was a lending culture, and people were putting
much more time into lending. So, I noticed that after the report came out, there was a lot
more attention on professionalizing the supervision mission, the forms that you needed to
use and pay attention to, because it really wasn’t a science per se. People had to learn
how to do a good supervision. I think that was one.

The other is the overall focus on portfolio because again, as a bank, we were investing a
lot but there would be little attention to how that portfolio was doing. And the
Wapenhans Report put a lot of focus on making sure the portfolio was actually
performing well and cleaning up when it’s not, making sure there’s restructuring, shutting
down or transforming projects that were not doing well so that you have a well-
functioning portfolio.

And I think the third thing was to give much more respect and balance towards people
who were working on supervision rather than new projects, because there was a lot of
excitement, and most people wanted to be posted on new projects. And I think that
created a rebalancing, and that, I think, overall helped.

I found out much later on, when I became Infrastructure Director, how important all those
early lessons post-Wapenhans were because the infrastructure portfolio was one of the
worst in the World Bank, and with increasing attention and focus on project supervision,
restructuring, and renewal of the thinking during the supervision process, the portfolio
could be transformed. So it has been, in my experience, a major impact in terms of the
thinking about supervision and portfolio issues and the practice of those activities.

ZENNI: Would you say there was more emphasis on the qualitative rather than the
quantitative aspects?

LEAUTIER: Absolutely, because again, supervision as practiced at the time was very
slim and, you know, you take a look at the legal agreements and whether the country was
doing what it had committed to do. There was not much attention on institutional issues.


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There’s more attention now, perhaps not enough still, but much more than there was
before the Wapenhans Report, and the real focus on making sure you get a feel and a
sense of the project.

I might add, perhaps, even the early beginnings of the attention in our current focus on
corruption came from the Wapenhans report, because without being able to supervise
properly, it was very hard to detect what was going on in a project. So, I would say the
Wapenhans Report laid the foundation for many different things, going beyond financing
at first to really hard issues on institutional performance, as well as the use of Bank funds.

ZENNI: How would you assess the effectiveness of Bank infrastructure development
interventions in Latin America at that time? What was your sense of that?

LEAUTIER: Well, Latin America during the ‘80’s and ‘90’s went through an incredible
urbanization phase, almost like what’s going on in Africa today. And what helped in
Latin America was the huge investment that the region made on infrastructure, and
particularly because it helped link up the cities and helped to produce the benefits
between urban and rural investing.

I remember a census done in Brazil which had concluded that the investments Brazil
made in two areas, one is on the education of people through television, and the
investments in the highway system, became among the major thrusts that allowed the
country to impact on population issues, for instance, because education on population
management and managing family, education of women, all of those things could happen
much faster because communication improved. It was really solid growth for such a vast
country as Brazil, but also the investments in education and the use of modern media that
did it.

So, I would say the infrastructure portfolio contributed hugely, including work we see
now in the capability to export, because of the link between the highway and the port
system, the functioning of the airport system, the investments in IT and the whole
telecom reform and energy, which again is one of the major, major inputs for
development. So, I think for the bulk of it, the investments have made a positive impact
on the economies in general.

There were some, perhaps, not wisely selected priorities, which happens in many
countries where investments go to the wrong regions or to the wrong parts of the country,
but in general the large scale of the infrastructure investments have made a huge impact,
including energy trade between Brazil and its neighbors. None of that would be possible
without the investment in energy and trade, trade in the Mercosur region in particular but
also the kickback [inaudible] into exports outside the region.

ZENNI: Moving on, in August of ’94, you moved to the Policy Research Department
and worked in the Environment, Infrastructure, and Agriculture Division. Please discuss


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the circumstances leading to your move to the Bank’s research complex, and what were
your main responsibilities?

LEAUTIER: When I was in Latin America, I got approached to provide some input to
the World Development Report on infrastructure, and that got me quite interested into the
research that the World Bank was doing. So when an opportunity presented itself, I got
hired to join the department to try to raise the level of research done in infrastructure.
So, it was also very opportune for me because I was also starting a family at the time, and
having a job that allowed me not to travel quite as much was very helpful. So, I joined
the department for three important reasons: one, the interest in research of the World
Bank; two, for trying to renew my skills, having done a lot of operational work; and
thirdly, for family reasons. And that’s how I ended up joining the Research Department.

ZENNI: And I guess you’ve answered the follow-up questions to that: “What were the
emerging priorities for policy research and analysis at that time, and which research
themes in particular did you emphasize?� Did you wish to add anything?

LEAUTIER: Well, at that time there were a number of areas, interface areas, which the
Bank was grappling with. One was how to justify investments in large-scale but
distributed infrastructure like water supply and energy, and there was a lot of interest in
willingness-to-pay methodologies, which required a background in economics, some
knowledge of the way environmental systems work, and a link to engineering and
infrastructure. So that interested me a great deal, and those were among the main topics
of research at the time: contingency analysis of projects, pricing issues, because countries
were going through these tariff reforms, and it wasn’t very clear how high we could raise
prices before they start to have a negative impact either on the environment or on the
affordability and willingness to pay of users. So, that was one area.

The other big question at the time was decentralization because, again, was it a good
thing that infrastructure responsibilities were going to the states and the provinces? What
were the benefits of decentralization? Was it always positive? And a lot of the work we
did at that time was reviewing the economic impact of decentralization of large-scale
infrastructure. And that helped shape the policy that the Bank had at the time when
advising countries whether to decentralize or not, and if yes, how for these very large-
scale infrastructure systems like roads and so on.

ZENNI: One of the main messages of the ’94 WDR, the World Development Report, in
examining the link between infrastructure and development was to stress the importance
of improving the quality of infrastructure service over the quantity of infrastructure
investment as being vital to the goal and measure of development in infrastructure. How
did your work in the research complex influence your future thinking on economic
development in general, and especially infrastructure development?

LEAUTIER: There were two puzzling findings at that time: first, countries that


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invested large amounts, when you look at the public spending on infrastructure, were not
growing any faster than those that hadn’t, and second, there was a puzzling question as to
whether infrastructure contributes to economic development or not. And it turns out that
the main difference was that we were not measuring the quality of the investment, and
that’s really key--you can have large networks of roads but with a very poor surface
quality, so they’re not reliable. You can have people connected to water, but getting zero
or one hour a day each, the connection or number of connections doesn’t have any
impact. Or in those days--I think people have forgotten now because of the availability
of cell phones--but connectivity for telephones was quite a problem. You would have
your phone line not working for many days, so the fact that you had a telephone in the
house was not a good enough indicator of that investment. So, the attention on quality, I
think, really pushed the economic analysis to where it really makes a difference, to see
that it’s the functioning of infrastructure that matters and not the fact that it is present or
not, and the WDR was a very important marker for that.

And it also helped in two areas of policy for the Bank. One was the ratio of investments
in capital versus the operations and maintenance. At that time there was a policy in the
Bank that the World Bank could not finance maintenance, and the reports were able to
show that because it’s the quality that matters, that maintenance may be one of the most
valuable things to invest in. And the second area was in the, again, attention to
supervision, that you don’t just close down the project when the roads have been
constructed or the pipelines are in place, but that one could also come back and take a
look at how those systems are performing and open up a whole opportunity for the World
Bank in terms of reforms in the sectors, focusing on the operational quality of water
systems, energy systems and so on, and laid the groundwork for what we have now, for
instance, on renewable energy and efficiency of the energy sector, which is the
foundation for most of the work we do on environment. That’s very important, in
opening up areas of policy and enterprise.

ZENNI: Thank you. In July of ’96, you moved to the South Asia Region, Country
Department I, and worked briefly in the Infrastructure Division where you were
subsequently promoted to Senior Economist. Please discuss your move, what were your
main responsibilities, and how did your work in research help you tackle the challenges
in a region that is home to the largest number of the world’s poor, most of whom are
women?

LEAUTIER: While I was in the Policy and Research Department, I got approached by
the person who was responsible for the infrastructure strategy for Sri Lanka to see
whether I could spend some time advising the team and helping, because they had a
major reform they were going through and my work on Peru had been seen as an example
of how one should go about doing strategy for infrastructure on a countrywide level. So,
I started working with the team on a part-time basis while still remaining in research.

Because the work became quite demanding, I was approached to join the unit at the time,


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so I left the Research Department to go to the South Asia unit on a full-time basis. I
focused mostly on Sri Lanka when I first joined, and that was because of the strategy that
they were putting in place but also because they were trying to accomplish a very
challenging approach to infrastructure, focusing, on one hand, on community level
infrastructure--the role of women, for instance, in water collection, energy use, and so on-
-and on the other hand the larger-scale investments in reforming the ports, the urban
transport system and so on, giving a very wide range of portfolio issues to look at. I
learned a lot from that job. And I think one of the most important things that the research
contributed to was in the area of decentralization because Sri Lanka was looking to invest
quite heavily in the outside Colombo areas, and the responsibility for investments but
also maintenance of these systems would fall on either communities or local authorities,
and the research was very helpful in that area.

The other area of research that was extremely helpful was the impact of privatization and
regulation on infrastructure performance because, again, what kind of privatization makes
sense; how would you regulate monopolies if they were going to be privatized; should
you privatize at all? Those were the kinds of questions that the country was grappling
with, and the research was very helpful in that regard.

ZENNI: Well, in August of ’97, a year later or just over a year later, you moved and
served as Sector Manager in the Infrastructure Sector unit, still within the South Asia
Region, where you remained for almost two years. Please discuss your move from a
country to a sector focus, and what did you set out to accomplish.

LEAUTIER: Well, the sector unit that I was asked to manage was a merger of what was
previously the India and Nepal group with what was the Pakistan, Sri Lanka, and
Bangladesh unit, because there was a consolidation to bring those two departments
together. So, I was asked to take over a unit which had about a hundred people, focusing
on infrastructure for the whole South Asia Region.

The focus at the time, which I found very interesting--because you asked me earlier about
the Wapenhans Report--was a lot of the strategies for the Bank at the time were done at
the country level, yet many of the really complex questions of reform and performance
were at the sector level, so the job that I took over gave me a chance to take a look at
issues from a sectoral perspective once again, because in the LAC region the project
perspective was not really sectors per se. And it was really useful to actually have the
balance between the two, the country and the sector, because you really need both in
order to come up with a good project design, good policy reform, and strategies for
countries.

I particularly learned how important it is to know what the general market economy of
the country is doing in order to best decide what aspects of infrastructure to invest in and
also why certain investments actually don’t perform because of the institutional issues
that tend to be countrywide, such as the way the civil service is functioning, for instance,


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or how performances in a particular sector are improved because you make a major
reform (as was done in a number of countries in South Asia) or the way procurement was
being practiced and the competition to award contracts and so on.

So the balance, I think, was very helpful in having to see both what I learned at the
country level and how that could be brought to bear at the sector level and also reaching
back to sectoral expertise, a key value add for the World Bank when it comes to these
country-specific issues.

ZENNI: What is your assessment of Bank interventions in infrastructure in South Asia
at that time and, in your opinion, what impact was an increasingly decentralized bank
having in affecting results on the ground when South Asia region was greatly
decentralizing within the Bank?

LEAUTIER: Right. Well, the Bank, I think, had a much harder time in South Asia in
infrastructure than it did in Latin America. The countries were at very different stages of
reform. It was much harder to get changes and transformations at the institutional level
because of the number of sub-regions or states.

So the infrastructure projects that did extremely well in South Asia were mostly in
transport, where the transport portfolio was doing very well. I remember, for instance,
the investments in road connections between India and Nepal, which were very important
for opening up trade between the two countries, but then the bottleneck was in the area of
customs reform, which tended to be outside of the infrastructure sector, or very
successful community-level sanitation projects that were equally successful in
Bangladesh, Sri Lanka or India, which was, again, going down to a decentralized
provision level.

But we had very limited, I would say, impact on water sector reforms. We had very
limited impact on the energy sector. So these were two very difficult sectors for the
World Bank in South Asia, and I think they still remain so. Transport and urban
management tended to be a lot more malleable.

But I remember three projects which I feel very proud to have been associated with. One
is the Jamuna Bridge, which was one of these massive investments that allowed a country
that is subject to floods, Bangladesh, to connect two regions of the country that had never
been connected before. And the bridge carries with it also the electricity, telecoms, and
gas pipeline and has a road and rail connection, which is a huge infrastructure project.
It was also one of the early projects that went to the Inspection Panel, and so I got
involved in preparing reports for the Board for the Inspection Panel, and it ended up
going from a project that went through the Inspection Panel to be an example of how one
should do large-scale infrastructure projects which involved environmental impacts,
social impacts, relocation, and so on. So that was one thing in particular.



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The second one that I remember also very closely, because it was one of the complex
projects, is a project in Mumbai that was helping to relocate people who were landless
and homeless, living along the railway tracks with a very high incidence of accidents, and
trying to provide them with alternative housing and sanitation, in particular. The project
took forever to be prepared, more than 10 years, went through huge transformations in
terms of the way institutions that were in those areas were looked at, and it ended up also
being one of the more complex infrastructure projects that the Bank had to be involved
in. I think the lessons learned from that, both for Maharashtra and for the World Bank,
were very, very important.

And then the third one would be a project in the North-West Frontier Province of
Pakistan, which was working with people in small towns and in the marginal areas of
cities and seeking balance between rural and urban development, by helping them come
up with the investment that they needed in order to participate in the economy. The
striking feature from that are the interviews we had for the kind of priorities the
community would have. And in Pakistan you couldn’t talk to men and women in the
same environment; you had to interview them separately. And the priorities that came
out were not completely aligned because the men were looking at commerce and access
to water and travel for their businesses; the women were concerned about sanitation and
water for their families and being able to spend less time doing those activities. But we
eventually managed to bring a common project that benefited both genders in the
community. So that sensitization to the gender differences in demand for infrastructure
was one of the things that I keep from that time.

ZENNI: In June of ’95, with change at the helm at the Bank as [James D.] Wolfensohn
became the Bank’s ninth President, a number of institutional changes were undertaken
including the implementation in ’97 of the strategic compact and a further
decentralization of Bank operations, and South Asia was considered the most
decentralized region of the Bank.

LEAUTIER: Right. Actually, I remember--when I mentioned I had a hundred staff, 60
of them were in the country offices. They were in six country offices, and it raised three
important aspects for the World Bank. One is how we communicate, because, again,
with the time difference with more than half of the staff in the region and the rest in
Washington, it created a very important need for the South Asia Region to decentralize
decision-making. So that was the first region that posted Country Directors in the
countries and gave them responsibilities beyond just portfolio overview.

The second important factor was the balance between global and country knowledge,
because the staff that we had in the country offices, the majority of them were local staff
that we hired because they knew about their sectors in their countries from a different
perspective than the people we could have brought from Washington. And I think we
had very quickly raised the need of how we communicated, the important role that ISG
[Information Solutions Group] had to play, because we had to invest in communications


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so that people could have the same access to documentation there that they would have if
they were in Washington. I don’t know--it’s kind of almost unimaginable now to think
that you can log on in Colombo or Delhi and have exactly what you have in Washington.
That wasn’t the case when I was a task manager. I remember you had to go through a lot
of difficulty. It was very slow; it was sometimes impossible. And today people can
access it quite easily, and that was really because of the investments that we made in
communications at the time.

And then the third, I think, important change was on the issue of whether the matrix is
sector or country and how you get the right balance, which was played almost daily in the
South Asia Region because the people that we had in the country when they talked about
their sector, they were bringing with them knowledge about the constraints and the
opportunities within that country’s sector. So the issue was not whether you have more
folks in country or more folks in sector but how you bring the two together.

Those three changes, I think, helped the South Asia Region take a major leap in terms of
what it means to be decentralized. It raised a lot of questions around staffing decisions:
are country staff different from Washington staff? So, things like different contractual
agreements, hiring policies of the Bank and the HR reforms needed, lots of issues I think
came up at the time, and the region became a leader in forming them and also presenting
options for other regions in terms of how they should or could decentralize.

ZENNI: By May/June of ’99, you were promoted to Sector Director while still in the
South Asia Region. Please describe the expansion of your responsibilities in terms of
general oversight.

LEAUTIER: The South Asia Region, in addition to being the most decentralized, had
also taken a management principle of flat structure. So it was one of the regions that did
not have sector directors, sector managers in the way you had in other regions. There
was no hierarchy. There was the Vice President and then the Sector Directors and
Country Directors reporting directly to the Vice President. And so becoming Sector
Director for me was more a title promotion rather than a change in terms of managerial
responsibilities because I didn’t have any sector managers under me; I had senior staff
managers. What that changed was the approach that I had to take towards management,
because I could not rely on delegation in the way you would in a hierarchy. I had to rely
on teamwork and collaboration and cooperative ways of working with very direct
communications in order to be able to manage a hundred-person unit with no layer in
between.

So, what made it interesting for me is that in all other settings, I was representing the
region on the Infrastructure Sector Board, so I had to go to four Sector Board meetings
because there was no one else to go, and I think it raised a lot of questions about what’s
the style of control and what are the balances between managing flat and the advantages
that that brings versus hierarchy. And I think in the transition after I left, the region


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decided to create sector managers because the job was really quite a difficult one, and the
lessons learned from flat management versus delegation in a hierarchy were very quickly
used to reform the way the unit functioned.

So, I was one of the guinea pigs in flat management, an open space, which would assume
new ideas in management, that the more you opened up people and communicated, the
better ideas would flow and the more innovation and teamwork you would get. So I
think we proved the point that that is true, but then you had a huge cost in terms of the
time that the manager spent on substance versus management and also the challenges of
what we needed to do when you have 60 people in the region and only 40 of them in
Washington. So, it was a hard lesson I would say. In a way, I got the best management
experience from that. [Laughter]

ZENNI: Well, looking back on your experience in South Asia, what, in your opinion,
have been the major constraints to poverty alleviation in that region?

LEAUTIER: I think there are a number. The first one is the region tends to be very
punished by environmental bottlenecks, flooding being one of the most serious ones,
earthquakes, and the balance between the two. I mean, you see up to today the effects of
the tsunamis, which also happen in East Asia. So I think environmental catastrophes are
one of the major challenges for the region.

The second challenge is the fact that the region has still quite a few conflicts. It doesn’t
work as harmoniously as a region the way you have within East Asia or Latin America or
even in Central Asia today, so there’s still political limits to the region’s functioning as a
region. I’m very happy to say that in the 15 years I’ve been at the Bank, those
bottlenecks have been dealt with over time, so you find a lot more functioning of the
South Asia Region as a region today than you saw, for instance, 15 years ago with even
transport links between Pakistan and India which didn’t exist before, trade agreements
and agreements on movement of people and so on, including the communications
between neighboring regions.

I think the third challenge is one of sheer numbers of poor people. South Asia has a
huge, huge share of the poor of the world when you look at India and Bangladesh, just as
two of the examples. But for everything I see as a bottleneck, there are many, many
events of progress that have taken place. Bangladesh has been one of the most
remarkable transformations in terms of poverty reduction. India, when you see the role
India is playing today and its development, is quite amazing.

On the opposite extreme you have Nepal, which is going through a huge political crisis
and difficult civil conflict and very, very tense transformations and conflict. Sri Lanka
has had the same. So the region has this excitement and possibility, with great strides of
progress, and the World Bank played a major, major role in that, but also has quite severe
challenges in terms of environmental incidents as well as political and civil crises.


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ZENNI: Thank you. In January 2000, you moved again and served briefly as Director,
Private Sector Development and Infrastructure, in the Office of the VP. Shortly
thereafter, in April of that year, you became Director, Infrastructure Department. Please
discuss the circumstances leading to these moves at a time when infrastructure
investment in developing countries was falling significantly, and what objectives did you
set out to pursue at that time.

LEAUTIER: That was actually a very, very exciting move. I remember having an
interview with the Vice President at the time, Nemat Shafik, who was charged with not
only turning around the quality of the infrastructure portfolio but also raising the level of
investment in infrastructure overall. And because I had worked in different parts of the
Bank and had a balance between operations and policy and strategy and research, I was
approached to apply for the job. So I ended up moving there, one of the most difficult
things because I was having a very good time working with Mieko Nishimizu in the
South Asia Region and had a very good set of people I was working with. Manuel
Penalvar-Quesada was Operations Director, and Ed Lim was Country Director, so there
was quite an interesting group of people and very challenging work with the clients.
I accepted the job because I felt it would be an opportunity to really bring in the lessons
learned from Latin America and South Asia but also from research to bear on the
thinking about the infrastructure.

My first challenge was to help improve the functioning of the Sector Board so that they
could play this role of vetting the country or sector issues, balancing at the regional level.
So we had to restructure the way the Sector Board functioned, put in an HR role for the
sector so that they could bring in the talent that they need, and in thinking through how
those Sector Boards were structured, who sits on them, what they do, what’s their role in
policy and strategy, HR and so on, and then on the other side to look at the reason why
the World Bank should stay involved in infrastructure and how it should go about playing
that role, both in terms of the challenges for the portfolio and the challenges in defining
projects in a time when the private sector was investing quite massively in infrastructure.
And there was a question whether even the World Bank was needed at that time. So,
those were the two main questions.

But as Infrastructure Director, as I also had to restructure the central unit because at the
time directors reported to directors and I had to basically make a transformation, so we
ended up merging energy and water into one unit and transport and urban into another
unit and had managers for those two units, and then brought the rest of the sector
managers and sector directors of the region to the Sector Board function that would then
help the whole organization responsible for infrastructure work in a harmonious way.

So, the thinking on the strategy and the policy, on the one hand, with Nemat Shafik and
her front office, and the practice of actually managing the infrastructure directorship gave
the possibility to actually implement the thinking that we had at the time. We also at the


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time started with this work on zero-based budgeting because with the Strategic Compact
coming to an end, we had to figure out how do you actually leverage the investments that
we had made through the Strategic Compact and the reforms that the Bank took at the
time where they [inaudible] decentralization, the investment in the balance between
country and sector work, the local knowledge, global knowledge, and how these staff
skills can be brought to bear to bring all of these up with less money because we had
promised the Board at the time that we wouldn’t go for an additional budget request.

So zero-based budgeting was a very useful way because we could look at everything
from scratch, and we introduced those principles and worked to put in place an allocation
mechanism for the budget, which allowed the benefits from the strategic compact
investments to be maintained and leave room for investment in new areas, particularly
partnerships. We had structured several units, obtaining important synergies. At the time
there was ESMAP [Energy Sector Management Assistance Program]. There was a water
supply program, and a whole series of large-scale partnerships which were financed by
donors outside of the World Bank budget that needed to be brought in line with the real
strategic directions of the Bank. Those were the challenges of the job at the time and the
things that I paid a lot of attention to.

ZENNI: Within infrastructure, how critical a role do global trends, as in urbanization,
environmental degradation, et cetera, and global concerns such as corruption play in
shaping infrastructure investment? What is your overall assessment of Bank efforts in
establishing basic and sustainable infrastructure in developing countries, and what do you
see as the emerging priorities for the Bank’s infrastructure strategy in the 21st century?

LEAUTIER: Well, first, globalization could not take place without infrastructure, so
infrastructure is a foundation for globalization. And the trends in urbanization and the
increased speed of globalization put a lot of pressure on the performance of
infrastructure, but in a very different way. There are globalization activities that tend to
centralize activity. For instance, when you look at companies like Ikea or The Gap and
Nike and so on, they source from multiple countries and therefore demand lots of large-
scale, long distance transportation and communication, but then they also have very
concentrated areas of supply and manufacturing that put demands on urban transport and
urban infrastructure, whether energy, water supply, and so on.

So we find that the infrastructure system is stretched in two dimensions with the speeding
up of urbanization and globalization: one, to perform much better in the interconnection
role, and the other to do much better on its day-to-day quality and functioning. The other
challenge, I think, that both urbanization and globalization pose on infrastructure is that
the supply of infrastructure and the demand for it tend to also be global, because before
the speeded-up globalization, if you are living in a city, your water supply system is
really for the residents that live in that city. With globalization, when you look at tourism
and travel, the foreign direct investment for manufacturing and other production
distributed across countries, the performance of that water supply and the demand for it


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becomes global, because if I am a tourist and I am in another city, I do care about the
quality of communication, the water supply, security, the city, and all of that. So this
interface and merging or fusing or morphing between local and global takes place in
infrastructure in a much more profound way.

And the third is the production of the infrastructure itself, because with increased
globalization, investment and the putting in place of these systems also become global. A
company that builds roads in one country becomes the same one that builds roads in
another, and it has an ability then to transfer technology, ideas, standards, and so on much
more broadly and quickly across. So all these factors impact on the infrastructure and
what it is needed for, used for and demanded for.

The implications for the Bank are really quite dramatic, and I am very pleased to say that
the Bank has dealt with them very well. One is the need for global standards on
competition and awarding of contracts, the whole procurement approach to providing
these goods and services where the Bank has been a leader. And most of the countries,
when you talk to them and say, “What is the one major contribution that the Bank has
made?� a country like China will tell you the financing of the World Bank in China is not
the most important thing, but what they have learned in procurement and how to organize
and structure competition in contract awards is one of the things that they cite. And this
is mostly in infrastructure.

The second thing I would say is also how the Bank balances country-specific versus
regional and global patterns of investment, because, again with globalization, a small port
in a small country can be the major bottleneck to the export of goods, and the investments
in capacity in that port, if you’re looking only at that country may not have taken place.
But the Bank has a way to balance it, looking at country versus global demands for
capacity changes. The Bank has also done quite well, especially when you look at the
work in the logistics and trade area and the attention that the Bank is paying now to those
questions has come about because of this growth in demand for logistical services
worldwide.

And the third one would be what we now talk about, particularly in cities: the
professionalization of management of infrastructure. Now city leaders have to be
managers. Before they could be political appointees who have a term, and they serve
their term and they move on. But because of the competition that cities now have with
the rest of the world, the quality of managing both policy and strategy and day-to-day
operations at the city level become the major constraint. So, it’s given the World Bank a
whole series of opportunities to advise and to support in the area of city planning, city
management and so on, which is opening up an urban portfolio in very interesting ways.

And then, finally, the environmental concerns, the fact that we now share water systems,
air quality and pollution and so on, and how multi-country solutions and regional
solutions to solve these problems come about, and the attention on renewable energy and


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the attention on efficient transport to reduce congestion and air quality, improve air
quality in cities, and how countries can deal with those problems within the regional or
the global context.

So I think globalization and urbanization have made it very interesting for the World
Bank to be in place, because those are things that the Bank can offer quite easily, and
remains one of the few comparative advantages of the World Bank, even with all the
competition from the private sector, regional banks, and other players in development.

ZENNI: How do you look back on your accomplishments as Director of the
Infrastructure Development? And as a woman, how easy or difficult was it working in
infrastructure?

LEAUTIER: Well, when I look back, I’m very excited about what I was able to do. I
joined the World Bank at the time when the Bank was rethinking what it was doing with
infrastructure. I was able to participate in the rethinking, and one of the rare things that
you could actually see, the results of that thinking; it’s very rare in a job that you get to
see all three phases: the thinking, the strategy, the doing, and then eventually see the
results. So I was very fortunate to have seen it and to do that.

In terms of being a woman, I mean, I come from a discipline that has not very many
women practicing in it. In civil engineering there are very few women. I was one of the
only women on a site, for instance, where I had to have special accommodations just to
be able to supervise the work, so I have always had to think about how to function in
environments where I’m either the only one or one of very few women. I think it
prepared me very well for the World Bank and being able to think about the need for
infrastructure and development that are gender sensitive because, again, how you think
about development also has an impact on the kind of policy, strategy and investments that
you go through.

I have not found it to be a bottleneck in terms of day-to-day work. I have actually found
it to be a challenge and an exciting one. I had a very supportive family, so having
children and being able to be--because I was appointed manager two weeks before my
second child was born, and so I had to very quickly figure out how to manage two young
children and a very heavy job with a hundred-unit person and how to get that balance
right. I was helped very much by my mother-in-law and my mother, my husband, who
helped with the bottle feeding of the baby when I was away on mission and I had to leave
breast milk in the refrigerator for that, so those were some of the things we had to
organize around.

I would say it has been very exciting. I have never felt intimidated or ill treated or badly
received. I think it was mostly funny at times when clients would be expecting
somebody else and they see you come, and being able to have these awkward moments at
the beginning and dealing with those; working in rural areas where people would be quite


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surprised that I would be leading the mission at times, but especially in infrastructure
because they were not expecting that. But I would say overall it has been an exciting
opportunity to deal with these challenges rather than a bottleneck, until more recently
when I had to commute; then that was very difficult, because then I was working and
living in different places. Balancing that with my family; that was very challenging.

ZENNI: Well, moving on from your hard input to the soft input process in your Bank
tenure, as you so aptly put it in your correspondence to me, and on to your appointment
as Director to the Office of the President in March of 2001, where you served briefly in
that capacity through the end of that calendar year. Please discuss the circumstances
leading to this particular move. What were your main responsibilities, and what in
particular do you think prepared you for such an assignment?

LEAUTIER: I remember two incidences when I met President Wolfensohn. One was
when he came to celebrate with us the turning around of the infrastructure portfolio from
the worst to the best when I was Infrastructure Director at the time, and he was very
excited because it was really a major achievement by the staff of the Bank that worked in
infrastructure to get that transformation. He came to talk to me about work that we did,
how did we go about it, and what were the main lessons learned on how you turn around
the portfolio.

The second time was when I was invited to address Corporate Day on why the World
Bank should remain involved in infrastructure, because at the time the Vice Presidents
had undergone a voting and prioritization and had concluded that the Bank really doesn’t
need to be involved in infrastructure because the private sector is there and these
investments should move to the health and education sector. And I had to defend, if you
like, through strategic analysis and policy work, why the Bank should remain focused on
infrastructure.

So, after those two incidences--and they were quite close together; they were within, I
think, a month and a half apart--I got a call from the then-Director in President
Wolfensohn’s office saying that he was leaving and that he had been charged to find a
replacement, and in looking at various profiles, he and Jim thought that my profile would
be best for the kind of things they wanted to do in the office at the time. So, he asked me
whether I would be willing to have an interview with President Wolfensohn, and I was
very surprised and definitely not really ready to think about it because I had just started
this new work and we were looking to the next stage of changes in infrastructure.
So I went for the interview, and at the end of the interview I was very, very certain this is
the type of job that I would like to do and the person I would like to work for.

So I accepted the position and moved in to work with President Wolfensohn. He had
given me a number of challenges to help him with. One was the functioning of his own
office, to make sure that the way he communicates with the Managing Directors and the
VPs allowed for the smooth flow of ideas, decisions and so on, and also the way that


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people communicate with him from the outside and the correspondence and his
interactions with them also goes in a smooth way, and the people who work in his office
can get a better balance between life and work because the hours were very, very
challenging. So those were related to his office and the way he functions with the rest of
these management teams. And the second challenge was how he could keep a listening
ear, to be able to hear staff and hear their concerns and be able to stay informed about
things that are happening at the Bank and how he could immediately get resolutions on
those and what kind of mechanisms would work best. And then, finally, on processes by
which he could improve his strategic listening, and strategic definition between him and
the Board, him and the senior team, and him and the staff in general. Of course, there
were the other questions around his travel and his day-to-day functioning, whether he
could get time for exercise and so on. So, there were quite a wide range of challenges.
So we worked on that.

We put in place a few structures that helped: the Management meetings that he had with
his Managing Directors, the one-on-ones with the VPs, the Corporate Day and how that
was structured, and so on. So we worked on those aspects. For those goals in terms of
his office, we put all the correspondence electronically so that the speeding up of the
response could be monitored (the delegation to the VPs on what they were responsible for
versus him vis-à-vis responding to the outside world and whether he wrote or they did);
how many times he can go to the Board and how this balances with his travels; the
balance between Part I and Part II countries; where he goes; who he spends time with.
We would analyze how much time with his staff versus clients, with the Board versus
managers and so on.

So, it was a very strategic time to be there but also a very tense time because that’s when
September 11th happened. So, I remember walking with him to talk to the staff who
worked in the mail service of the Bank because of the anthrax issues, being able to make
sure that communications with staff happened effectively and so on. We worked very
closely with Gerry Rice and EXT [External Affairs] at the time and were able to really
get the staff of the Bank to feel that they had access to the President because that was
very important to him and very important to him to be able to be available for decision-
making and discussion while being available for travel and representation of the Bank
outside and how to get through the calendar system that we followed. Those were the
things I was working on with him.

ZENNI: How do you look back on experiencing the workings of the Bank from a unique
vantage point such as the Office of the President?

LEAUTIER: Well, one of the most striking things that I noticed is the extent to which
the World Bank has to be responsible for what it does and says both internally and
externally and how really important communications was: not just that you do it, but
how you do it.



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The other factor is how interconnected are most of the things that the Bank does; for
instance, the fact that our performance in a country or in a sector has an impact on
whether the donors will continue to finance the Bank, the IDA [International
Development Association] negotiations. The way in which the staff of the Bank--on the
one hand they are the major ambassadors of what the World Bank does outside, but they
are also key to the success of the Bank, and how important is making sure that they have
high morale and are able to understand where the Bank is going and communicate to
them the strategy of the Bank so that they could in their day-to-day jobs, because the
World Bank is one of these high-knowledge organizations and what everyone does in
every interaction with a client is what makes the difference. So, the more and more staff
know about what the broad strategy is, the more capable they are to go ahead and make
the right decisions in the workplace.

And I think, also, observing how the President was able through various sources to zero-
in on what’s the most important thing to focus on for the World Bank Group, how
quickly he noticed the cancer of corruption and how quickly he spoke about it despite a
lot of resistance from various quarters, but also how he was able to do it while bringing
everybody along and not creating tension and divisiveness. I think those were very
important lessons that I learned, and also the way the governance of the Bank, the
balance between the role of the Board and the role of a government because I could see
how the President functioned in the day-to-day Board meetings, in the once- or twice-a-
year strategic meetings he had with the Board, in his coffee hours with the Board, but
also how he worked with the ministers and the heads of states and how the Spring and
Annual Meetings became the conduit for all these interconnections. I think those were
very, very important lessons for me to see how you actually have to have all of that work
in harmony and how each piece has to be thought through and done well in order for the
smoothness of the work of the Bank to proceed as well. Very important!

ZENNI: Okay. Now, we get to your WBI tenure at the Bank. Did you want to do this
today? Are you fine with it?

LEAUTIER: Yeah. We do have time.

ZENNI: Okay. In December of 2001, after less than ten years of formal service in the
Bank, you became Vice President of the World Bank Institute (WBI). Please discuss
how this appointment came about. Describe the main challenges you faced in heading
the Institute, and what objectives did you set out to accomplish.

LEAUTIER: I remember an afternoon where President Wolfensohn walked into my
office and said, “I have something I need to ask you, which is going to be very difficult
for me because I have just come from a meeting with the Managing Directors�--at that
time, Peter Woicke, Shengman Zhang, Mamphela Ramphele, and Jeff [Jeffrey A.]
Goldstein--“and they have suggested that you would be the best person to go and
transform the World Bank Institute.� He said, “I’m saying it’s difficult for me because I


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would like very much for you to stay, and it’s a selfish question for me to really want to
ask you to decide whether you would accept this or not.�

So, I took time to think about it because I was really enjoying the work I was doing in his
office and I felt there was still a lot more to be done. But eventually when I asked him
what he would expect from me in the World Bank Institute and what the challenges were,
as well as when I talked to the Managing Directors to see where they thought the major
questions were, I decided to accept and to then plan the transition to move to WBI. I
worked to get my replacement (who became Xavier Coll), and I moved on to WBI. So,
that’s how the appointment came about. It was from one of these processes where the
MDs look at lists of people and look at their skills and so on, and I was asked then based
on that to take on the position.

I started off by actually first talking to my predecessor, Vinod Thomas, and talking to all
the managers and directors in WBI at the time and to staff and getting lots of information,
reading, and looking in and out as to what the World Bank Institute was doing and what
the outside world was doing in the area of services and training and development of
decision-makers in countries. And that’s how the strategy came about to basically focus
on the role that the Institute played for the World Bank as a group, but also the role that it
played in capacity development at the country level and how to get a better balance
between these two, because at the time the Institute was super-respected at the country
level, but very few people inside the Bank Group actually knew or even cared about what
the World Bank Institute did. So, that was what I learned from my interviews and
therefore focused on the strategy to try to bring these two challenges together.

ZENNI: How have worldwide and fast-paced technological advancements impacted
WBI’s strategy and objectives, as this was at a time when technology was taking off?

LEAUTIER: Right. Vinod, when he was VP for WBI, had taken the decision to invest
in the Global Development Learning Network (GDLN) and had really seen this as a key
opportunity for the Institute to leverage through technology its capabilities. So, basically,
when I joined the Institute there were only ten distance learning centers, and we worked
from there to try to get them almost in every country and to have multiple ones for large
countries like China and Brazil and so on. And today--I don’t know what the count is
exactly today--but there are well over 140 centers around the world. They are carrying
the bulk of activities with actually quite a few changes from expectations that we had
during the early days. We had thought that the GDLN would serve WBI in its
investments, as it does capacity development around countries, but today more than 60
percent of the activities are actually point to point without even involving the World
Bank. So we became the enablers for a process of dialogue in exchange, which nobody
could have imagined at the time. So, I think technology played a major, major role, and
dialogue as a tool for learning and for change became absolutely critical, and I think the
investment in GDLN and the thinking that technology would be the key driver for these
activities was very, very important.


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I was looking recently at an assessment done. Three thousand books are published daily
in the world today. So, if you are about transforming ideas and knowledge through
sitting down with ten people, clearly you are not contributing as much as you could if you
were working with other links. So the investment in the spreading to multiple points so
that a seminar in Washington can be seen by millions of people was a very critical one.

The other factor is that there are more SMS text messages to be exchanged today than
there are people on the planet, so, again, you can’t transfer ideas and knowledge just by
talking to a few people. You have to think of almost modularized, byte-sized ways in
which to reach people all the time, and again investments in the use of the internet for
learning in particular are very critical, as well as the video conferences and the bulk of
what WBI is doing now in mobile communications.

But then the last one, which was very striking to me, when I talked to Vinod, he said,
“That’s not all that you need because people still trust where they can see and touch and
feel.� So the link to the soft issues that are not driven by technology, on whom people
would listen to and why, the importance of leadership and role models so that the
messaging can be heard and learned became also very important. So we then invested
much, much more on when you do face-to-face versus when you do technology, because
how people learn, how they transform is different, and whom they listen to and why also
matters because of that balance between the technology drivers on the one hand and
leadership and capacity and the soft side on the other.

ZENNI: Turning to specific issues regarding WBI’s integration and alignment with
Bank operations and your efforts therein, how do you see the centrality of WBI’s
contributions to the Bank’s agenda, especially in terms of immediate and future
challenges as the Bank is increasingly focusing on the delivery of non-lending services,
adapting its global knowledge and expertise to regional and local circumstances?

LEAUTIER: Well, one of the features that I was struck by is the QAG [Quality
Assurance Group] assessment of the quality of institutional and development objectives
in projects, and for many, many years this has remained a huge challenge for the Bank.
In the last ten years we have improved. We’ve gone from only 30 percent or so
satisfactory to now closely above 40, so a 10-point gain in this category of evaluation of
quality. So, institutional development and capacity remain bottlenecks for development
across the board. The investment in lending and what clients tell us they learn from the
Bank is their capacity to get ideas and learn from process changes that other countries
have gone through, which is all again in development of capacity. So, WBI has a very
critical role to play in this transformation. It had not always done so. It had done so in
the early years of transforming, for instance, the post-Soviet economy, where an office
was opened up in Moscow, and EDI at the time made huge investments in getting large-
scale transformation in people’s way of thinking about the market economy, including
how you build institutions for the market economy.


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So, that was a very successful role for the Institute. But then once the countries were
absorbed into the process of accession into Europe and functioning as independent
countries that work basically was stopped. So, it was an opportunity to take something
that was well functioning from the EDI days and look at it in light of the modern
challenges of the Bank vis-a-vis capacity development and see how WBI could play a
role by integrating these country operations and project work to get this part of the Bank
moving.

What we hadn’t anticipated in the lessons learned (for me, when I look back at this) is
that the ratios, just the sheer number of projects where capacity was needed and where
WBI was involved didn’t quite work out that WBI could make such a huge
transformation by actually doing this activity on its own. So, quickly we had to think of
how WBI can be again learning from something we did very well under the EDI days of
training of trainers but now do it the other way, of learning with learners and having the
people who actually designed these projects in the Bank and the people who implement
them in the country and the two teams together be the ones that would do everything but
have WBI play the role of facilitator. I think that’s how it ended up during the last few
years, and from the last survey I saw of Country Directors, over 90 percent of them
thought that that aspect of the work of WBI is going very well. So, we did succeed in
transforming the way in which capacity development work gets done.

The other aspect is that the Bank, while it has played a very important role in financing
and probably is still needed in Africa and in smaller countries of the world, is really no
longer the major player. Nick [Nicholas H.] Stern famously uses the 1 percent rule. We
are 1 percent of the financing of development around the world, and that’s true when you
look at the total figures. So, how do you make this 1 percent deliver 100 percent in terms
of impact? And again, that’s not lending, that is ideas; that is how people learn and
transform processes and policies and functions. So, I think that again brings the World
Bank Institute front and center to what contribution it can make in leveraging the non-
lending work, and I think there are three major contributions.

One is the fact that different categories of countries can learn from each other when
they’re at different stages, so the advanced economies have lessons to share with middle-
income countries, and the middle income countries with the lower-income countries, but
then also across the board lessons can be learned everywhere. We saw, for instance, a
conditional cash transfer program was developed in Latin America, starting with Mexico
and Brazil, and now it can be used in New York. And the lessons learned of how to do
this actually flowed from one middle-income country to the next and then from there to
other countries, like South Africa, Turkey and so on, and then to the United States. So, it
proved the point that a process that the World Bank Institute has put in place for sharing
case studies, discussions and learning in the global sectors can benefit all kinds of
countries. And I think the other aspect is that people learn best from people that they
associate with, a minister from another minister and so on. So, I think that is homologue-


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to-homologue learning and peer-to-peer learning, which is what we call it. The quality of
leadership again is another point which works extremely well, and we were able to bring
the leadership work of the Institute, such as ministers from countries that have come out
of conflict or heads of state from those countries who talk to those who are still
struggling, Burundi and Liberia and Central African Republic and the LICUS [low-
income countries under stress] countries in general were major targets for this type of
learning.

But also, how do you transform the environment sector? And when you bring a minister
from Mexico to talk to a minister from Indonesia and from South Africa, you get a very
different quality because they focus on the political and implementation aspects that
would make one policy function better than another, and the Bank brings the policy
expertise and the analysis and the research. So there’s this balancing between different
types of knowledge that also comes about from that process, what the Bank knows very
well versus what the practitioners know very well in how to bring it to bear.

And then I think the last thing would be in this--everyone has concluded now and M.I.T.
has created a poverty lab that is functioning on what they call a randomized evaluation---
that effective development is a learning business. If development is a learning business,
then how do you do and learn at the same time? Again, you find the questions or
dialogue, knowledge exchange, peer-to-peer discussions, but in a structured way,
becoming the major way in which you can get countries to quickly experiment. I think
the Shanghai Conference was maybe the highlight of demonstrating this capability
because we were able to take case studies of what worked, what didn’t, and why, and
people would discuss those and then say, “In my country, the solution in Tajikistan
probably would be better than what we’ve been trying,� and vice versa. So, who you
learn from and what you learn became really quite important because countries and
practitioners are able to see from each other in very concrete ways how they could go
about transforming their economies and getting large-scale poverty reduction results.
Because again, all the results or the lessons from the 1990s and the recent rethinking of
the impact of the previous 60 years of investment in development have shown it’s not
what you do but how you do it that makes the difference, because most people agree that-
-those who criticize the Washington Consensus--that what policies you were able to do
was not the major issue but when you do them, how you do them and the whole
sequencing and implementation made a huge difference. And that’s what this
methodology or the strategic dialogue for change has helped demonstrate, and I think the
value added of WBI.

ZENNI: With regards to WBI’s contribution to the Bank’s strategy, as in
complementing its lending in building capacity aimed at promoting policy and regulatory
reforms, building institutional capacity, et cetera, please discuss in particular WBI’s
contribution in strengthening the Bank’s engagement on governance and anti-corruption
aimed at encouraging paradigm shifts within country reform strategies, despite political
complexities.


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LEAUTIER: Well, The World Bank Institute is, I think, a major part of the potential
solution that the World Bank has when it raises its investments in non-lending, not only
in the complementary role between lending and non-lending but also in the independent
role of non-lending. On the complementary side, I will start with the work we do on
corruption and governance, where you see the role of WBI in very critical ways.
First, in benchmarking and assessment, just knowing what are the various practices of
governance across countries, where the countries rate in terms in different forms of the
practice--that is, the quality of the judiciary, the voice and participation levels, the
regulatory environment, and so on. So the investment that the work, for instance, of
Danny [Daniel] Kaufmann, which is joint work between WBI and DEC [Development
Economics] on measuring governance, I think is really critical. There is a second
generation of those measures which is to go now beyond country comparisons to really
the focus on practical and operational indicators which the Institute is investing in which
I think will take it to the next level, particularly measures around, for instance, how
media, in fact, is functioning and the contribution that that has towards transparency of
decision-making and accountability, the functioning of parliament, decisions of
parliament, and all those very detailed operational indicators, I think, are very key.

The second aspect, in addition to measuring and benchmarking, is actually supporting
those institutions, particularly on the demand side of governance that are important for
getting good development results. And WBI is well-placed to do that because it has
worked traditionally with what we call “non-traditional audiences of the World Bank�--
working with civil society, working with NGOs, working with women’s groups and
communities, working with parliamentarians and the media--because for many years the
Bank was restricted to working with the government and the ministries instituting it. So
this audience that WBI has been historically working with—including academia--has
given a very good window into the demand side of governance, those people who will be
asking for accountability and change in their countries and how those then have an
impact on the way that the institutions of governance improve at the country level.

The third value of the Institute is in transferring lessons learned, because governance is a
very culturally sensitive subject and varies depending on where countries are in terms of
their political transformation. So being able to have a safe space where people can
discuss these issues, can see how countries have learned, improved, and transformed
themselves from very different starting points, gives an opportunity for reform. So, for
instance, even a country that is not willing to accept that they have corruption in the
country, but if they’re able to discuss the best ways to structure competition for large-
scale contracts and is thus able to reduce the level of waste and inefficiency and
corruption in the awarding of contracts, we are able to make a contribution.

So the Institute has these three distinct roles that it can play, particularly in the area of
governance and corruption, and can do that in a non-threatening environment because the
Institute doesn’t do any lending; it doesn’t come with any conditionalities; it comes with


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ideas and dialogue. I think that provides a very good complementary toolkit to the World
Bank Group in general, because it has other instruments for which it would have to, for
instance, introduce conditionality; it has to introduce fiduciary accountability and so on.
This is a good set of tool kits that can be offered to clients in a completely neutral and
open environment for learning for the purposes of deciding on their own and getting
ownership for the very difficult governance reforms.

ZENNI: Okay. Again, talking about WBI’s contribution to the Bank’s strategy, how
effective, in your opinion, is the Bank’s engagement in emphasizing and stressing the
importance of transformative results-based leadership within its client countries, and how
instrumental is WBI in affecting this engagement?

LEAUTIER: The Bank has done a very good job at the advocacy level to basically
advocate for accountability for results and accountability of institutions, and the fact that
they need to transform in order to deliver those results.

WBI’s contribution, I think, is more in the area of, first of all, getting people beyond the
advocacy and knowing that it is important to do, to get them to actually discuss how they
go about the transformation and what does it actually mean to have results-based
leadership in a country. How do you go from talking about results to actually measuring
those results and monitoring them over a large period of time? And how do you go
beyond the mere statistical capacity to actually a group of people and institutions that
cares about these results so that they can be sustained over time, because many of the
investments The World Bank Group has made previously in data collection have not been
followed through. Was it because there hasn’t been a group in the country that actually
wants this information? So the Bank has invested at the project level on performance
indicators and so on, but when you look back, you don’t see that investment continue.
That is one of the reasons why there is such weak data in a number of sectors, whether
it’s health or education or infrastructure. So the Institute can help in that regard by
actually linking the statistical and investment side for data collection on the one hand and
the demand for data for decision-making and the accountability for the results on the
other hand, and this balanced role is a very important one.

We have, actually, a number of examples where we have been working with OPCS
[Operations Policy and Country Services] and the regions. And the ECA [Europe and
Central Asia] Region is a particular one where a number of countries have looked to
transform the role of their public sector institutions in this sub-stage of accountability and
transparency. And working with the leaders who started with a strategy and a vision and
a promise to their constituents of the results that they will accomplish, and then a system
of monitors and monitoring and measuring and benchmarking that can allow countries to
see how they are doing, and then the group of institutions--NGOs, civil society
organizations and so on--that actually keep asking, “Where are we on the results?� and
that those three together are leading a whole series of countries in the ECA Region
towards much better results.


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There is one, which was the case study for the Shanghai Conference, which is on trade
and transport for Eastern European countries and how might continuing information on
the various reforms that they are taking and where they are in implementation--the whole
set of countries moved very quickly to implement reforms that were quite difficult,
because everyone could see where the other country was in terms of not only the policy
defined but also the implementation and the results. So that is one example. And the
leaders, I think, play a particular role in that, and that is why we invested heavily on this
“leadership for results,� including the Capacity Day discussions on that topic. So those
are the kind of environments, because it is how you facilitate, what you talk about, and
whom you are going to talk to. And when you talk about leadership, most leadership is
learned by example. So I think that was one of the things we focused a lot on.

ZENNI: How did you characterize WBI interactions with other parts of the World Bank
Group such as IFC [International Finance Corporation], MIGA [Multilateral Investment
Guarantee Agency], et cetera?

LEAUTIER: Well, the EDI in the early years of WBI were focused mostly on the
IDA/IBRD part of The World Bank Group. And in recent years we have been doing a lot
more work with the IFC and with MIGA.

With IFC, mostly around the questions of corporate social responsibility and the role of
the private sector in development, and there are a number of pilots ongoing now which
we have agreed to do jointly with the IFC in capacity development for improving the
business environment, which would, in the long run, I think, turn the strategic
contribution that WBI has with the work of IFC.

With MIGA, it has been around the questions of guarantees and the guarantee
instruments. We have done some interesting work, including bringing people from
MIGA into WBI and from WBI into MIGA, which has been one of the key ways to get
these exchanges. And then, of course, we worked together on the Learning Board, which
is for the whole World Bank Group, and the focus on learning.

With IFC we are also doing some interesting work with their HR team on societal
transformation, because IFC keeps the seat for the World Bank on the Society for
Organizational Learning, which the World Bank is a member of. And we do work very
closely with that particular group in IFC to help get the change in IFC and the rest of the
Bank in terms of how you create a learning organization and the different tools that need
to be used for that. But I must say that there is a distance to go for WBI to really be an
instrument for the whole World Bank Group.

ZENNI: Would you like to break for today?

LEAUTIER: I would like some water, actually, and I think we have only five minutes


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left. So probably it is a good time to break.

ZENNI: Okay. Until next Friday?

LEAUTIER: Yes, because next Friday we have another two hours.

ZENNI: Yes.

[End of session 1]




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                                        Session 2
                                      May 18, 2007
                                     Washington, D.C.

ZENNI: Good afternoon. I am Marie Zenni. Today is Friday, May 18, 2007. I am back
again at World Bank Headquarters for my second and final interview session with Ms.
Frannie Leautier. Welcome again, Ms. Leautier.

LEAUTIER: Thank you very much, Ms. Zenni.

ZENNI: We ended Wednesday’s session as you discussed WBI’s interaction within
other entities comprising The World Bank Group, specifically IFC and MIGA. Is there
anything you wish to add to that?

LEAUTIER: No, I think we covered most of it. I think the only thing I would like to
say is that there is a lot of potential, and WBI has made inroads into trying to extract that
potential, but looking at the trends in the balance between lending, non-lending, the role
of the private sector in capacity development, and the particular role of public/private
institutions, there could be a lot more to do with the World Bank Institute working more
closely with IFC and MIGA.

ZENNI: Okay. Thank you. Moving on within WBI, you have already talked about
WBI’s building capacity endeavors within IBRD and IDA countries. How much of
WBI’s capacity-building is aimed internally within the institution in helping retool World
Bank staff, and how do you view its value added aspects in terms of lower costs to the
Bank and meeting needs directly relevant to Bank interests?

LEAUTIER: WBI has three instruments that it uses to help the Bank build its own
capacity. One is the evaluation of all the learning activities of The World Bank Group.
The World Bank decided to decentralize responsibility for staff learning to each of the
Business Units and, through the Learning Board, the allocation of spending across the
Business Units is done as a percentage basis of the total budget. And WBI’s Evaluation
Unit evaluates the outcomes of the learning and that feedback is used to redesign the
learning program.

The second instrument is by inviting Bank staff to join client/staff learning programs.
We have a number of activities. They range, depending on themes to between 10 and 20
percent staff participation in those activities, and they are designed in this joint manner
because we found that development is an experiential learning process. So Bank staff
learn the best when they are actually learning with the clients who are facing the
problems in development that need to be resolved. So this form of joint Bank client/staff
learning has been very useful, and that is something that the WBI specifically does.

And then, of course, the third area is WBI has an instrument called B-SPAN, which is


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like C-SPAN in the television world, where we record every single seminar or dialogue
that is taking place in Washington and put it online so that people who couldn’t attend the
seminar can actually watch and get to hear what Joe [Joseph E.] Stiglitz says about
globalization or listen to Amartya Sen on the role of human capital or any of these key
thinkers who come to the World Bank. And in the last year we have introduced that
methodology for bringing voices from outside the Bank into the Bank by recording
dialogues and seminars that take place outside of Washington in recognition of the
decentralized presence of the Bank. And then staff in Washington can then benefit from
an activity that took place in Brussels or Paris or Cape Town or Beijing. So that’s the
third main instrument, which is really learning at your own pace in your own office.

So those are three main instruments, but there are other instruments that are used as well.
For instance, we developed the accreditation system for trust fund accreditation; helping
design it, but also worked in administrating the tests and testing the early results so that
you could get the self-paced learning in people’s offices to get accredited to manage trust
funds. And in our work with the networks and also with the IMF and the IMF Institute,
we put together learning programs, seminars, conferences and so on where we are really
working in support of the networks and these other entities.

So we do get involved quite heavily, but we are not the major player; we are not
accountable for staff learning. We are accountable for evaluating it, for introducing
innovation in the way it is designed, including joint client/staff learning, in bringing in
new ideas into the Bank through B-SPAN and other methodologies, and in helping the
networks and other business units, including the regions, to design their learning
programs, but our focus, really, is client learning and capacity development for clients.

ZENNI: Okay. What, in your opinion, do you think prepared you for the assignment to
head WBI?

LEAUTIER: I would say first, perhaps, my academic background, because after
graduating I did teaching and research and got involved in activities resulting in having
adults learn, so that probably is one. And the second would be my project experience,
because I got to see some of the capacity constraints that prevented countries from seeing
really large-scale development results. And maybe the third thing was the time I spent
with the President and seeing the World Bank from that broad, broad perspective.

ZENNI: How would you describe your experience as the first female to head the World
Bank Institute since its establishment in 1955?

LEAUTIER: Well, first, I didn’t know I was the first female, but now that you remind
me, I see that when we did our 50th anniversary, there were only men in the list of people
who headed the Institute. I haven’t thought much about it that way because it was a very
natural job for me to step into from that perspective. I found it has been very useful when
I go places to have women come up to me and say, “Wow, isn’t it fortunate that we can


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talk to you about these issues in a very relaxed way?� And I think to a certain extent this
helped people come forward and suggest ideas for policy and so on. But, I mean, I am
very proud to have been the first woman. Maybe that says something I should have
known, but I think it has been more than rewarding than anything else.

ZENNI: Now, as an African, how has your passion for development and your
commitment in advancing the knowledge process impacted your endeavors within Africa,
especially in light of the renewed focus of the international community on accelerating
development in Africa?

LEAUTIER: Well, one of the most interesting aspects for me is this increased attention
to finance, and this attention is recently going to Africa. One of the activities that we did
during my tenure at the Institute was the Shanghai Global Conference on Poverty where
we tried through a case study methodology to uncover what works, what doesn’t, and
why we focused on financing for development. There were over a hundred case studies
presented, and the most interesting feature was that during the discussions before the
conference itself, during dialogues, field visits, and so on, many of the African
participants were very excited by the possibilities of large-scale results that they saw
from experiences in other countries and, more particularly, the interactions between
China and Africa that took place through the field visits at that time became the
birthplace, for now, for this increased financing and support that is coming from China to
Africa but also, more interestingly, from other countries.

One of the sessions we had in that conference was increasing development financing.
And a lot of the attention that we got to support that idea came because of the challenges
that Africa was facing. So that is one major area where I got really involved in Africa
learning from other parts of the world. As we organized this series of events, we
connected up the Annual Meeting of the African Development Bank to the Shanghai
Conference and got quite a large audience to participate. We had several heads of state
from Africa come to China, and that became a very good opportunity for them.

Other things that I have been doing is I worked with a number of colleagues to get the
African diaspora in science and technology to invest in their ideas and solutions to think
through what Africa could do differently to really bridge the gap between where it finds
itself today and where other countries are in terms of science and technology.
There are only about 80 scientists and engineers per thousand people in Africa, compared
to 400 in the northern part of Africa, and 1200 in the Central Asia, South and East Asia,
and over 2000 in the more advanced economies. So Africa finds itself in large orders of
magnitude behind in the area of science and technology. And that is something that,
being a scientist and engineer myself, I felt very committed to do, and working with a
colleague who had this idea in the World Bank Institute to mobilize the African diaspora
we have been able to go quite far to create the African Institutes of Science and
Technology, with campuses in Abuja, Arusha, and in Ouagadougou, and we continue to
invest in these linkages with existing universities. So those are the two main things that I


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can say I personally got involved in with regards to Africa.

ZENNI: How do you look back on your accomplishments as head of WBI, and what
advice would you want to give your successor?

LEAUTIER: I think maybe three things would be of note, if one was looking back at
where the Institute was when I first came and where it is today. One is the approach to
capacity development. I think when we first started about five years ago, I remember
looking at evaluation results which showed that a lot of the activities we were doing were
having impacts on individuals but not necessarily on the organizations in which they
worked or on the country from which they came from. And so we introduced a different
methodology to say “we need to go beyond the individual.� And I think that was one of
the first shifts and one thing I am very proud of in moving WBI to focus beyond
individual training and skill building.

The second one is the role of country-specific ownership and learning from peer to peer,
again through looking at capacity development from a country’s perspective, looking at
the organizational bottlenecks, and helping countries learn from each other because of the
practices and policies that have already been implemented from others. So instead of the
World Bank or the World Bank Institute going and talking about reforming the incentive
structure in the education sector, you bring the minister from Mexico who implemented
that, and through that dialogue can transmit not only the policy but also some of the
implementation aspects, and I am very proud of the fact that we could actually move in
this direction. And that has always been a hallmark for WBI in terms of methodology
done many years back by all my predecessors, but I think during the time I was here we
took it to a different level and really crystallized this peer-to-peer approach.

And the third thing I would say would be the work we have developed on leadership,
because, again, we realized some of the reasons countries don’t advance is because many
of the reforms don’t have champions that can carry them through or people who are seen
to lead from an idea to implementation. So we spent a lot of time focusing on leadership
development, looking particularly at leadership for results and leadership in conflict
countries and, of course, in conflict situations. We also looked at young people as leaders
of the future. I think those are things I am particularly proud of and feel that it has moved
the Institute to a different level.

Technology, I think, was already there under Vinod Thomas; we probably took it to
scale. I already mentioned the GDLN, distance learning centers going from ten to 140.
So those are some examples, but the trends were already there before I came under
Vinod’s leadership. I tried to focus on other improvements to go beyond what had been
already achieved.

ZENNI: And what advice would you want to give your successor?



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LEAUTIER: I think we started but we hadn’t quite completed the work of making WBI
core to the World Bank instrument toolkit, serving not only IBRD and IDA but the whole
World Bank Group, and also perhaps differentiating WBI much more to other players in
the capacity development field. We tried to do that during my tenure, but there is still a
lot of work to do going forward.

And in terms of specific advice, I would say the Institute has benefited from autonomy
and independence, and I would suggest to my successor to guard that really, really, really
well, because it is one of the few reasons why The World Bank Institute is able to do
what it does and get credibility around the world. It has been seen as an independent
source of ideas and opportunity and space for dialogue.

ZENNI: Thank you. Moving on to the World Bank Presidents, what is your assessment
of the various Presidents under whose leadership you served at the Bank? And you have
already partly talked about Wolfensohn in your capacity as Director in his immediate
office. And a follow-up to this: What should be the criteria, in your opinion, for
selecting World Bank presidents in terms of both their personal and professional
attributes?

LEAUTIER: Well, during my tenure I served under three presidents, and President
Lewis Preston was the first. I was very impressed by his style of seeking feedback. I
remember he used to have these lunches with groups of staff where he would ask the
Managing Director to oversee bringing diverse people to talk to him. It was a very short
period of time, but that was his way to find out what was going on. I was very junior in
the organization at the time so I didn’t get to see his style from a very close and personal
perspective, but I was very impressed with his capacity to actually engage in seeking
ideas from the staff gathered and using them to shape his views about the organization.

The President I have worked with the most closely and have immense respect for is
President Wolfensohn. I observed him when he first came to the World Bank. I think he
has been fantastic in three dimensions.

The first is opening up for the first time a competitive process for the selection of
managers into the Bank because it was during his time when the Bank’s positions were
advertised. Anybody could apply, and a process was put in place for competitive award
of management positions to start in the Bank. That is how I became a manager. I was on
mission in Colombo and saw the announcement saying, “Management positions would be
out there and competitively advertised for the first time in the Bank. If you think you
qualify, apply.� And I applied and got selected from that process. So I was very
impressed by his vision of knowing that a competitive process could generate a good
outcome.

The second thing that impressed me--and this is also before I worked closely with him--
was how he went to foreign policy positions and options on the basis of analysis but also


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very careful listening, and being able to get a wide range of people from inside and
outside the Bank, hear their perspectives, and then use that to form his opinion.

When I worked closely with him, I learned three very important things: One, he is an
incredible man in his capacity to absorb information and remember all kinds of things.
He would have meetings, maybe 10-15 meetings a day. He would go home every
evening with homework, a big pile of homework, and he would come back to a meeting
and he would have read all the materials he had taken with him, and he had remembered
and negotiated the key points with clients. He was superb during the Spring and Annual
Meetings, and it was quite an amazing thing to watch him do that. The second thing I
learned from him was on public speaking and how, as the President, he could convince
people of some very difficult issues, what he needed to do prior, what he needed to do
during the consultation, and the meeting process itself. I learned a lot from him in terms
of the soft skill of influencing and convincing people. And then the third thing I learned
from him is really the integrity and value for a leader, and when, as a leader, you
separate, when you say you’re sorry, and when you press ahead because you believe that
that’s the right thing to do, and the judgment to decide on these things. I think those are
things I learned and admired immensely from him during the three years that I worked
closely with him.

And I was there during September 11th, and I remember the capacity for him to pour out
and absorb a lot of emotion from people and calm the organization down and handle that
crisis in ways that staff actually bonded and connected together. He was a master at that,
and I think the farewell when he left was a very good indication of how people felt about
him in the latter part.

I haven’t had too many interactions with President Wolfowitz. Of course, interactions
with him are at the more senior level than I had with President Preston. I did not have a
chance to observe him closely either, so what I think he did well was to--he made clear
about his own perspective on the issues and shared that quite well, which I did admire,
because in this organization you tend to be very diplomatic, and he had sometimes to
weigh very difficult issues. So that’s something I admired in him. However, I did not get
to see the degree of participatory approach that he had as closely as I did with
Wolfensohn, so it’s hard for me to make any judgment on that. He’s not somebody I
knew very well.

ZENNI: And, what should be the criteria, in your opinion, for selecting World Bank
presidents in terms of both their personal and professional attributes?

LEAUTIER: Well, I think in general the world has moved towards competition as a
way of selecting the best product, and I think for a large and complex organization like
this one we probably could learn from what the UN did, because they still have a political
process for appointments but they were able to introduce competition and a very rigorous
process of interviewing, reference-checking, and selection. So I think that, in my view,


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would be an appropriate way to go, even if the final decision of who gets named as
President is done by a subgroup of shareholders. But the fact that competition to get the
best product is the driver of whom we select, the process of checking whether they have
the capacity to manage a complex organization, I think, would be best practice. And that
would be my view of how we could actually learn from the United Nations and then try
to implement it in the World Bank.

ZENNI: Moving on to reflections in general. In terms of long-term challenges for the
Bank’s poverty alleviation agenda, how do you see the evolving roles of both the IBRD
and IDA, and their continued relevance on the global stage? Particularly, how do you see
the long-term challenges for IDA’s credit reflows in light of recent debt forgiveness by
the industrialized countries and an increase in IBRD and IDA grants?

LEAUTIER: I think the trends we have been seeing with the middle-income countries is
really not growing very much in their demand for IBRD from the Bank Group, and that is
a signal for us that we need to rethink how we deal with IBRD in general. And I say that
because, at the same time, those very countries have no trouble borrowing at market rates
or even working with the private sector. And you can see from IFC’s portfolio, which
has grown tremendously, that it is not a question of capacity to borrow at those rates but
more a view of what they think this instrument is available to them for.

There are some exceptions. Countries that actually see IBRD’s value not only in the
financing perspective but more from the knowledge and ideas that they can get by a
relationship with the World Bank, and China is a good example of that. But there is a lot
of room, I think, to restructure the IBRD instruments, focusing a lot more on the non-
national clients like provincial and city governments, perhaps even looking at public-
private partnerships and bundling financing jointly between IBRD and IFC, if that is
possible. A lot more use of guarantees instruments and using the credit-worthy countries
and the credibility that they bring to extend risk-taking on the balance sheet of the World
Bank to partnerships with MIGA and the IFC guarantees instruments but also the World
Bank guarantees. And also the IBRD/IDA blend, which again is a very interesting one,
and perhaps for the countries that are not IDA eligible, looking to use much more
blending of IBRD with other grant mechanisms that come from other donors, including
ones that we haven’t really looked at, that the IFC has done very well in terms of its
approach of domestic financing, and how one can look at IBRD and a blend with
domestic financing in this way of balancing grants versus loan elements.

IDA, I think it was a very good decision to eliminate debt and forgive debt for the
countries that were highly indebted because it has given them a chance to recover and
reform and redefine their development strategy. I think the risks to the World Bank have
been largely resolved because of the negotiations that took place in here. We should give
credit to President Wolfowitz for really getting that through. And so I don’t think that is
a major risk; however, the future reflows of IDA, I think, are particularly vulnerable, and
it highlights to us the importance of The World Bank Group being seen as a multilateral


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institution, because the IDA reflows are highly dependent on political strategies in donor
countries to allow such flows to flow to The World Bank Group. And so what the donor
countries’ citizens think about that, what their parliaments know about that, makes a huge
difference.

So here I would say the work we have been doing with the parliamentary network for the
World Bank, the investment in having the average citizen of the donor country
understand what the World Bank is doing is very critical, because now we have
something like Bono and Bill Gates talking about development in a very credible way,
and the World Bank hardly has a stake within that. And I think that is an area we need to
reclaim because we have the credibility to do it, and somehow in the last few years we
have lost the platform in talking about development at that level, and we instead are very
silent participants to activities that are driven by, you know, other personalities. And I
think that is an area which, for the organization, we need to pay attention to.

And the last one I would say is having a very smart approach to working with the
international NGOs like Oxfam and so on who actually had a very good window into
poverty issues and development issues at a country level and command tremendous
respect internationally, and how we can use all of these voices to get the respect for the
work of the World Bank and, therefore, additional contributions to the work of IDA.

ZENNI: Thank you. Speaking of NGOs, what, if anything, in the criticisms directed at
the Bank by the NGOs and others do you consider legitimate and worthy of serious
attention?

LEAUTIER: First of all, I think the minority of NGOs have criticized the World Bank.
To a large extent, the World Bank has the support of the NGOs. But when they do
criticize the World Bank, it would be for errors where either we have had an oversight
over the state in terms of the way policies and projects are defined. I mentioned earlier
development is a learning business, and it is very risky, so we could not know all the
risks in advance. So there are times when mistakes are made, and NGOs do criticize the
World Bank for that.

Sometimes I feel that NGOs could supplement for weak governance in countries. And
so, to the extent that the World Bank is not consulting broadly, those critical voices from
the NGOs concerned are a very useful platform for improving the performance of the
Bank in poor governance settings. But we need to be mindful that the way we work with
NGOs doesn’t actually undermine the very process of improving the quality of
institutions and governance at the country level. So I see the criticism has been useful for
learning, useful as a sounding out in areas where information doesn’t really flow
appropriately because of weak governance, but also I see it as a risk for us to manage so
that we don’t end up listening to voices that could undermine the process of reforming
governance and institutions at the country level.



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But for the most part, I think NGOs are positive of the World Bank. And we find out
now that they are much more aligned on issues of debt reduction, for instance, on the
issues of climate change, on the issues of population and reproductive issues and
development projects that impact on women and labor issues, trade, child issues. So we
have a wide range of questions where we are in the same direction as NGOs, and I think
that is a good thing, that we do have the [inaudible].

ZENNI: In your opinion, how successful is the Bank in handling selectivity in its
operations, divesting itself from areas where other agencies have the lead expertise? I am
specifically focusing, now, on partnerships.

LEAUTIER: Yes. I think that we have tried, but there are so many opposing tensions
that make it very difficult for the World Bank to be selective, partly because we try to
look at country perspectives and try to be responsive to clients. So if the client asks us
for a very wide and diverse portfolio, if we are responsive to them, then we have to
address a very broad set of issues. I don’t think we have been as effective as we could in
deciding what our comparative advantages are across a wide range of topics and deciding
deliberately not to be engaged in certain areas. If you are listening to your client, you
tend to try to satisfy them, and that may be a very broad agenda that collectively they
would like but that is difficult for the Bank to address in totality.

The second thing is I feel that it is only very recently in the conversations on
harmonization and consultative processes at the country level that we actually have a
mechanism by which you can, at the country level, pick and choose who would be the
best agent to deliver on the development agenda. And I think for the countries,
particularly those that are pilots for harmonization, we have done very well. We haven’t
completely translated that Bank-wide to use it as a tool for selectivity in terms of the way
the budget is allocated and the way we select priorities. And the other area of selectivity
which I think we could do a lot better in is on selecting which global issues we are
engaged in and which we leave to other organizations.

Many organizations have the technical and intellectual capacity, but they don’t have our
procurement and global presence capability, so things end up on our laps many times that
shouldn’t have been there. So if, for instance, the UN system worked better, or if there
are other mechanisms for dealing with global health concerns or trade with the WTO, and
so on, we would not be needed in these areas. And we could argue that maybe the good
role for the World Bank is the, you know, actor of last resort in development, because we
have the capability to do that. But the risk it presents for us is that then we are really
spread very thin and we can’t put enough resources to areas that are really top priority
that only we are capable of doing. I think there is a lot more work to be done,
particularly on global issues, but most specifically at the country level to make better
decisions when we are doing the country assistance strategies and so on as to who would
be the best agent for development in those areas.



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ZENNI: Of your many contributions to the Bank’s mission, which do you consider to be
most significant, and why?

LEAUTIER: I think, for me, personally, it would be the space that I could offer to
people who are unsure about their own personal development and their own growth in
life and in their career. That’s something that I have done. I have always left time in my
calendar, and despite troubles, meetings, and the workload and so on, to have people
come and just talk. And initially I did that only for the people who report to me. So for
WBI staff, I had every Thursday a 15-minute slot that people could sign up to and come
and talk about anything. And that space, I think, when I look back, was something that I
find the most useful thing I could do given the limited time I had, to give people a space.

Some people would come to me and say, “You are the first Bank vice president I have
ever spoken to.� And that really hurt me because I felt that shouldn’t be the case. But
anyway, that’s the one thing I would say. I feel that I created a space where there is
something lacking in the organization and people found that this was a good way to come
and sometimes just tell me about what they are doing and what they hope to do in the
future, show me pictures of their kids, or ask advice on “Should I take this job or that
job?� or perhaps share a paper that they had written or . . .

And I have learned so much from those meetings, and I really enjoyed having the
opportunity to talk to people about all aspects of the Bank, from security guards to
directors, and so on, which I think was very useful, also, for me to get to know the
organization from their eyes. That’s perhaps the most important contribution I see.

ZENNI: Looking back, what have you learned from your journey/experience at the
Bank, and what has it meant to you personally serving as unique an institution as the
Bank?

LEAUTIER: Well, first, I find that this is not a job; it is a passion. I mean, working at
the World Bank is a passion, and that’s one of the things that over the 15 years I have
never once felt depressed about coming to work or worried, including during difficult
times when there were a lot of difficult issues to be resolved, because every time I
remembered why I was here and why I was working for this organization. I think that
passion is something that I hold most dearly, and also the area that I learned the most
from because when you are passionate about something you can be blinded by it. And I
learned most of the times when I thought I really knew what it is I needed to do to get a
result on a particular project or country or even within the organization, when I stepped
back a little bit from that passion and looked at things from a different perspective, I
learned that the passion is what kept me going, and that is what I think was important.
And I tell people, “This is not a job or just any job. It’s really quite unique.�

The other aspect: I have never been in a setting where you have such wealth of diversity
in an organization, whether it is diversity by culture, diversity by educational


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background, perspectives of people. And when you look at the future of globalization,
you look at the trends in terms of travel, interaction, in terms of production, consumption,
et cetera, and the fact that you have to deal now with all of these common problems; that
is, climate change, conflict, and so on. That is wealth, and how one can harmonize those
perspectives and opinions, I think, is a really critical aspect and quite unique to the World
Bank. It would be wonderful if the average multinational corporation could look like
that, and I think this is something now, especially being in the private sector and looking
from the outside, I realize is one of the huge assets for the organization.

And then the third one would be the--there is a balance between what the Bank knows
and what the Bank learns. And over the 15 years that I have been here, I have realized
that every so many years the Bank had an opportunity to learn in big leaps, and
sometimes we have used these lessons well, and sometimes we have been less diligent in
learning. You could quote, for instance, the Wapenhans Report is one of those moments
where you look at something and you say, “There is a problem with the portfolio, and
you need to fix it,� and you get a lot of interaction and you fix it.

You can have the other markers when people started yelling at us and saying “50 years is
enough!� and we used that window to learn from that. Then we have the lessons of the
1990s and the Shanghai Conference which indicated what doesn’t work for development
and how you should think differently about that. And now that we’re so decentralized, I
think the Bank has a great opportunity to listen and learn, and my hope is that it will be as
diligent in taking those lessons and embedding them into the other side that the Bank is
very well known for, which is giving objective, credible advice. I think those are the
areas that I feel are the most striking in working for this organization, and perhaps quite
unique.

ZENNI: Well, finally, is there anything else you wish to talk about that I might have
perhaps overlooked?

LEAUTIER: I think we have covered wide, wide ground. I mean, I got excited to work
for this organization because of being engaged with people who I thought were really
trying to get results in a short amount of time. And whenever people come to ask
whether they should consider the World Bank as an employer, those are some of the
things that I have been able to point to them, and I am very happy that many of them
ended up coming and presenting themselves to the World Bank. But I think, going
forward, I’m not sure the World Bank can really remain the way it is. The
decentralization is putting us in a situation where you really get to know, but there are
others who can do many of the things we do but not necessarily in the breadth and depth
that we can. And how we use that to balance the approaches that we take I think will be
the key. I don’t think we have learned yet sufficiently from that. That is the only
additional thing I would say, that there is a great opportunity, having created the
instruments for us to be present and knowledgeable about what goals are, and really get
the good sense of the countries in there, their challenges, their cultures, their hopes and


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their opportunities.

The next stage will be to harness all of this and put it to work for coming up with these
collective solutions that we all know are possible, and how we help countries that are not
developing countries but are equally important in getting to these solutions to learn from
that. Here, I am talking about the advanced economies in Europe and the U.S. and Japan,
because we are out there and present, and we could be a fantastic conduit for these
lessons learned. And I would think that, if we were restructured in the future, one could
imagine the World Bank of the future responsible for poverty reduction regardless of
where poverty is, and not only poverty reduction in what, quote, we call “developing
countries.� Because now, with inequality rising in Europe and the United States, with the
aging issues that countries like Japan and Russia are facing, there are so many problems
that the World Bank could be useful for. And I think this is more for the next 10, 20, 30,
40 years of the World Bank: think about how could the World Bank actually be an
instrument for poverty reduction across the world. If New York can learn from Brazil on
conditional cash transfers, what other lessons are there that are really universal lessons,
and not only limited to what we call developing countries, because eventually they will
develop, and the question then is, “Do you shut down the World Bank or do you give it a
new mission?�

And I would imagine that while we will solve problems of economic growth and per
capita income on average with globalization, since that has created inequality and pockets
of poverty even in the richest countries, so poverty is a universal problem. I think how
the Bank evolves to address some of these universal problems--the other one you could
mention is human rights, again another universal problem. You could talk about
preserving a species that would disappear and therefore be not available for the whole
world, intellectual capital, and property rights. There are lots of topics which are really
across the board, and I think the Bank can play an important role in that without much
difficulty. Being the World Bank for the whole world--and that would be a good use of
the name of the World Bank.

ZENNI: Thank you so much for taking the time and for your invaluable contribution to
the Bank’s Oral History Program.

LEAUTIER: It was my pleasure, Marie.

ZENNI: Thank you very much.

[E n d of sessi on 2]
[E n d of i n tervi ew ]




                                 Frannie A. Leautier
                           May 16 and 18, 2007 – Final edited