Harvard Rules by Richard Bradley Read Free Book Online Page B

defenders.
    â€œHis critics will tell you that there’s no one brilliant path-breaking paper,” said Richard Levin, the president of Yale and an economist himself. And that’s true, Levin admits. “You can’t say that Larry ever wrote one paper, or had that one great idea, that everybody just carries around.” But, he points out, Nobel Prizes in economics are sometimes awarded for a body of work. “Had Larry stayed an academic, he would have made great contributions to lots of bodies of literature. If Larry had written ten more years of articles of the quality he was writing, I think he would have won the Nobel.”
    But Summers would not spend the next ten years of his life writing more papers in economics. Instead, at the age of thirty-six, he was headed to Washington again, and this time he would stay for a decade. The economist and professor was on the verge of a profound personal and professional transformation. He was leaving behind the world of the university for, well, the world itself. And in just a few short years, he would become an international figure of enormous importance. Larry Summers—grandson of a druggist and an office manager, child of academia, ivory tower economist—would hold in his hands the fates of nations.
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    In January of 1991, Summers started a job as vice-president of development economics and chief economist at the World Bank. He took a leave from Harvard and moved with Vicki to Washington, D.C., the home of the Bank.
    The World Bank was founded in July 1944 at a meeting of representatives from forty-five countries in Bretton Woods, New Hampshire. Financed by contributions from member nations, the Bank was intended to help fund the postwar reconstruction of Europe. A second, though less explicit agenda was to use financial aid to promote democracy worldwide. The Bank would help pay for public works projects such as highways, hospitals, and dams, facilitating economic growth and fostering political stability.
    In its six decades of existence, the World Bank has never been well understood by those most affected by its decisions—usually the world’s poorest and least educated people. Some development workers and international policymakers around the world view it as a well-meaning organization doing its best to eradicate poverty. Others, suspicious of its anonymous, bureaucratic culture, think it an avatar for the business and ideological imperialism of the United States. Most Americans, unaffected by its works, don’t even know of its existence. But the Bank is an enormously powerful institution, and Summers was joining it just as it was poised to become even more so.
    His job at the World Bank was to create economic plans for countries that needed aid. It was a weighty task: Summers would help decide how much money countries would get from the Bank and under what conditions. Though it was a new role for him, he did not doubt his ability, and he had strict ideas about why national economies in developing countries went wrong. “Development failures are the result of national policies,” he would argue. “They cannot be blamed on a hostile international environment, or physical limits to growth.” Sounding less optimistic about government’s ability to effect social change through industrial policy than he had during his stint with Michael Dukakis, Summers articulated a kind of free-market tough love. “National policies have failed when governments thwarted progress, supplanting markets rather than supporting them,” he said. Using the kind of provocative imagery he would become known for, he added that countries without a strong central government and vigorous private sector were like “a cripple…with no legs, pushing himself around on a crude board with wheels, surviving only with begging and trying to look sympathetic to the potential alms giver.”
    But it was something that Summers didn’t