Danny Leipziger on
the Growth Dialogue

By Richard Willing
Photography: Julie Ann Woodford
Published: Fall 2011

Danny Leipziger's 28-year career at the World Bank may have been winding down as he neared the bank's mandatory retirement age of 62. But Leipziger himself, a world-wise New Yorker then serving as the vice president of the bank's Poverty Reduction and Economic Management Network, was just picking up steam.

"I felt that all my experience had made me something fairly unusual," Leipziger said. "I have academic credentials and real-world experience... I certainly didn't feel like a retiree."

So instead of retiring in 2009, Leipziger joined the School of Business. As professor of international business, Leipziger's expertise aligns neatly with Dean Doug Guthrie's emphasis on enhancing GWSB's global focus and presence.

For his part, Leipziger said that joining the faculty has re-energized him, allowing the continuation of his career-long commitment to eliminating poverty through economic growth.

"I've got great faculty colleagues, inquisitive and hard-working students," he says. "It has worked out well."

Leipziger has already made his presence felt. He has begun and maintains the Growth Dialogue, a forum that links academics, government figures and local and international experts with a common interest in the developing world and its progress. Leipziger has also become a timely and provocative columnist on the GWSB website, firing off one-pagers on subjects such as the outlook for growth, the increasing importance of behavioral economics and what the developing countries have learned from the recent world economic crisis. (Those lessons? Rely less on U.S. markets and more on Asian markets, and increase focus on domestic development.)

His course on Managing Developing Countries is often over-subscribed. Last year, Leipziger called on his network of contacts to help 21 MBA candidates fulfill their consultancy requirement by working for a pair of green technology manufacturers in South Korea.

"He is an academic and a practitioner held in enormous respect," said Guthrie, who took over as dean shortly after Leipziger joined the faculty. "He brings human capital, expertise and networks. I wish I had 10 like him."

The Growth Dialogue is Leipziger's signature project at GWSB, occupying about a third of his time. It is a successor to the Commission on Growth and Development, an independent body that from 2006 to 2009 produced research papers and special reports by scholars, political leaders and other experts. It also produced the 2008 Growth Report and a follow up that examined fallout from the 2008 world financial meltdown, which the report had not predicted, and suggestions for the way forward.

Michael Spence, recipient of the 2001 Nobel Memorial Prize in Economic Sciences, led the 21-member commission. Leipziger was its vice-chair.

The Growth Dialogue kicked off with an October 2010 conference examining the 2008-2009 recession and its implications for world growth. In June 2011, a conference in Lisbon brought together policymakers from African states, private sector leaders and representatives from the African Development Bank to address constraints to regional infrastructure development.

This fall and into next year, conferences are planned for Penang, Malaysia (city-led growth), Paris (technical innovation) and Bellagio, Italy (changing growth paradigms). Nobel Prize-winner Spence will lead the gathering in Italy.

The Growth Dialogue has issued its first working paper, on South Korea, and-particularly pleasing to Leipziger- has begun to receive requests for experts to supply advisory services to developing countries in the Eastern Caribbean region.

"The [Growth Dialogue's] project director and chief economist will have shops at the School soon." he says. "We are moving ahead."

Leipziger's interest in the world of business and the business of the world goes back to New York, to his roots in the Riverdale section of the Bronx. His parents, immigrants from Germany by way of Brazil, used several languages to discuss big ideas around the dinner table. His father, with a background in the import-export business on three continents, was a particular resource.

Already a year ahead of his class, Leipziger graduated from the prestigious Bronx High School of Science in 1964 and from City of College of New York four years later. At Brown University, the thesis for his PhD in economics focused on economic policy in Canada.

After stints with the U.S. State Department's economic bureau and policy planning staff, Leipziger joined the World Bank. He held managerial posts at the World Bank Institute and in the bank's East Asia and Pacific region, and he was director for finance, private sector and infrastructure in the bank's Latin America and Caribbean region. As vice president and head of the Poverty Reduction and Economic Management Network, his final World Bank assignment, Leipziger led 700 economists and other experts in developing economic policy and undertaking lending and analytic work for the bank's client countries.

He won distinction for leading the bank's $3 billion economic recovery loan for South Korea and for pressing equally hard for an $80 million donor-funded program, "Gender Equality As Smart Economics", to improve the capacity of women in developing countries to participate in the labor force and generate higher incomes.

Along the way, Leipziger found time to write books on banking, economic policy and development in East Asia and Chile and to publish more than 30 articles in economic journals. He is a frequent contributor to the Financial Times.

His central thesis is the need for developing countries to identify likely export sectors-for instance, manufacturing in South Korea-and to bring government policy and private support to bear on the target.

Developing human capital, he said, is vital. Leipziger noted that South Korea, one of the developing world's recent success stories, has a powerful GWSB alumni community: more than 1,000 MBAs.

Former colleagues say Leipziger's capacity for hard work springs from his intense passion for his subject.

"It's not just an academic exercise for him," says Mahmoud Mohieldin, Egypt's former minister of investment and now a World Bank managing director. Mohieldin worked with Leipziger on the Growth Initiative.

"He has a passion for what he is doing, and he is articulate. With Danny, it's about knowledge and skills, but also about beliefs," he said.

By way of example, Mohieldin explained that Leipziger used a variety of tools-newspapers, op-ed columns, newsletters, speeches, direct emails-to "make gender an economic issue."

"He doesn't ever stop," Mohieldin said. "He follows up on matters until he feels he has used every way and means of education to get his message across."

Vinod Thomas, Leipziger's World Bank colleague for 20 years, said a "light touch" and ability to "joke about the serious" made Leipziger a natural leader with an ability to keep the "whole thing in perspective."

"It was the intellectual edge and personal warmth that kept me so very close to him," said Thomas, now a director general and senior vice president at the World Bank's Independent Evaluation Group. "He had the spark and the wit, with all the seriousness when needed, at the meetings that we attended together for the better part of a decade."

Leipziger calls on all those skills as he assesses the postrecession status of most developing countries. The good news, he said, is that the developing economies as a group survived the crisis surprisingly well. Their banks and investment houses were far less likely to hold toxic assets or engage in "financial shenanigans." The housing bubble, he noted, was "not a big thing in Senegal."

On the down side, the food and fuel crises that preceded the 2008 crash are "coming back into play" in developing countries. At the same time, developing countries that tried to follow the Asian model by exporting their way into prosperity now face an international environment "far less hospitable to globalization and openness as [developed] countries retrench and worry about joblessness," Leipziger said.

"Most developing nations don't have alternatives to export-growing strategies," he explained. "They'll need to rely less on external growth, however, and find ways to be more productive."

Leipziger is from the school that says, contrary to past recessions, the world economy is unlikely to revert to the status quo. Instead, a "new normal" will emerge and it will feature continued but muted growth, higher debt and more government involvement in the economy.

For developing countries, Leipziger said, this is not all bad news. They will be forced to become less reliant on U.S. markets, more reliant on Asian markets and more focused on internal industrial development.

"The real key is the relationship between government [in developing nations] and business," he said. "You have to have a policy that relies on the private sector for exports and the public sector for infrastructure, and they have to be in sync."

For GWSB, the message in this is clear: By focusing on international business and, particularly, development, the school serves not only its students but the greater good.

"A school based in Washington, D.C., should necessarily leverage its position to be involved in poverty reduction and economic development," Guthrie said. "Beyond the broad brush strokes engagement with a major grounded issue, this is very much the way a business school can be a force for change in society.". GW