to Chile, the U.S. Ambassador in Chile wrote to President Truman that “our enemies are [...] charging that the International Bank is under the domination of Wall Street and that we are back to Dollar Diplomacy with the Good Neighbor Policy scrapped.”<sup>19</sup> Robert Garner was recommended for the position of Bank’s Vice President by Harold Stanley, one of the two associates of Morgan Stanley (Garner, 1972, p. 206), and Eugene Black, who ruled the Bank until the early 1960s, had been a Vice President at Chase National Bank. Black wanted either Douglas Dillon or David Rockefeller, both exponents of the élite of the American financial establishment, as his successors. This did not happen, but George Woods, who took his place in 1963, had until then been chairman of First Boston Corporation.

The third reason was that the first development loans proved very successful in that they were almost completely repaid. Although Bank disbursements to member countries increased from 250 million in 1947 to 708.8 in 1963, at the end of Black’s presidency, net transfers (i.e. disbursements minus repayment of capital and interest) followed an opposite trend, and at the end of the 1960s they were even negative.<sup>20</sup> When Woods became the Bank’s fourth President, the Bank’s profits were growing “at an almost indecent rate” (Mason and Asher, 1973, p. 407). Hence there was no reason, from the point of view of conservative bankers at least, to change policy.

# **4. Persistence and Change in the History of an Institution**

# _4.1. The Establishment and Consequences of Strategic Visions in Formative Periods_

This brief historical reconstruction has shown that the World Bank was involved with the housing problem from very early on in its history. It was involved in analysis of the issue conducted externally by the ILO Committee, and internally both by the Economic Department, which devised a loan pattern that would include housing loans, and by the missions to less developed countries, which proposed that traditionally bankable loans should be linked with social loans.

However, the Bank did not take up those proposals, and decided to grant loans only for directly productive purposes. Since this policy yielded high returns, it seems coherent to propose a functionalist explanation for what happened: there was a welldefined situation with certain constraints (funding, for example), and the institution developed a perfectly efficient solution for it.

The paper has provided evidence that this kind of explanation misrepresents the historical record. In actual fact, there were more than one option, and none of them was intrinsically in conflict with the others. For reasons that were not exclusively economic, the institution opted for one particular solution to the exclusion of the others, thus establishing a pattern that would be pursued long afterward.

The sociology of organizations has a well-established tradition of studies that analyze the mechanisms underlying the dynamics described above. Among these mechanisms, the most relevant here are the relations among different subjects and

> 19 Quoted in Kraske (1996, p. 60).

> 20 Data are from Table 7-1. _World Bank Loans and IDA Credits by Fiscal Years through June 30, 1971_ , in Mason and Asher 1973, p. 192, and Table 7-8. _Flow of World Bank Funds, by Type of Flow and Country Group, Fiscal Years 1947-70_ , in Mason and Asher (1973, p. 219).

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