Type of entity
Authorized form of name
Parallel form(s) of name
Standardized form(s) of name according to other rules
Other form(s) of name
Identifiers for corporate bodies
Dates of existence
Prior to becoming the World Bank Group's 6th President, Alden Winship "Tom" Clausen (1923-2013) had a long and successful career at Bank of America. After graduating with a law degree from the University of Minnesota in 1949, Clausen joined the BankAmerica Corporation. He was a senior vice president by age 42 and two years later became responsible for the Bank's international lending business. In 1970 he became president and CEO.
When Clausen became World Bank Group President in July 1981, the international economy was deep in recession. This contributed to a growing debt crisis in developing countries. It was also a period characterized by increased skepticism towards foreign aid, particularly by the Ronald Reagan administration in the United States. Clausen's response to these challenges involved an increased reliance on free markets and private sector institutions. He also recognized the need for the Bank to increase cooperation with other agencies when appropriate.
Early in his presidency, Clausen announced three priority areas which would receive special attention during his tenure: agriculture; energy; and Sub-Saharan Africa. Energy sector projects, in particular, were prioritized, as Clausen saw an urgent need to promote new supplies of energy. He announced an immediate 25% increase in energy lending, including substantial amounts for hydroelectric power projects, thus becoming the single most important area for Bank lending during his tenure. With regard to Sub-Saharan Africa, Clausen endorsed and implemented many of the suggestions found in a 1979 Bank study that examined barriers to economic progress in Africa. Recommendations included doubling the amount of aid to Africa to support infrastructure development and agriculture and energy sector funding. It also recommended structural redesign of economic policies in order to promote efficiency, encourage better market incentives for production, reduce subsidies to uncompetitive industries, and promote exports. Related to these objectives and in response to the ongoing debt crisis, the Bank increased funding of sectoral and structural adjustment, committing a total of $12.5 billion for adjustment operations by the time Clausen left the Bank in 1986.
The support of structural reforms required an expansion of the Bank's analytical work. The Bank under Clausen and chief economist Anne Krueger emphasize trade liberalization and became heavily involved in helping governments investigate their economic problems and identify available solutions.
In order to stimulate capital flows from other sources, the World Bank Group under Clausen increased its focus on cofinancing. Clausen turned to export credit agencies and commercial banks with the intention of helping developing countries enter into capital markets. He also increased the number and frequency of aid consortia and consultative groups and endorsed the "B-loan", a loan product that allowed IBRD participation in commercially structured loans. Recognizing that private investment was constrained by investors' inability to manage political risk, the Bank, under the leadership of general counsel Ibrahim Shihata, began planning the formation of an investment insurance agency. The resulting Multilateral Investments Guarantee Agency (MIGA) came into existence in 1988.
As President, Clausen presided over extensive reorganizations of the Bank's economic analysis, research, and policy activities, as well as its Central Projects staff. He also reorganized the way in which his senior management team communicated with him. Immediately upon his appointment, Clausen established a Managing Committee consisting only of the heads of each complex: the Senior Vice Presidents of Operations (Ernest Stern) and Finance (Moeen Qureshi); the Vice Presidents of Development Policy (Hollis Chenery followed by Anne Krueger in 1982), External Relations (Munir P. Benjenk) and Administration (Martin J.W.M. Paijmans); the General Counsel (Heribert Golsong); and the Secretary (Timothy T. Thahane). This Committee functioned as a team making basic decisions with regard to development policy strategy, resource acquisition and allocation, operating policies and program planning as well as administrative and financial policies. It was also charged with an immediate review of the Bank's programming, budgeting and control processes.
In 1982 Clausen also established three subcommittees reporting to the aforementioned Managing Committee. These included subcommittees for Operations, Finance, and Personnel and Administration. These subcommitteeswere chaired by the two Senior Vice Presidents for Operations and Finance and by the Vice President, Personnel and Administration and met whenever necessary to review matters under their jurisdiction.
The President's Council, a holdover from the presidencies of George Woods and Robert McNamara, continued to meet on a weekly basis and provided a forum for the exchange of views and ideas. In 1982, however, it was replaced by the Senior Management Council; the Council met once monthly and served as a forum for the exchange of views and ideas among all vice presidents. Clausen served a single term as President, leaving the Bank in June 1986.