The World Bank hasn’t always made loans to education. Post-World War II, the Bank focused mainly on infrastructure. Even when it did start lending to education in the 1960s, it used the idea of manpower planning, the process of estimating the number of people with specific skills required for completing a project. Only in the 1970s did the World Bank begin to think of education in terms of rates of return: the cost-benefit calculation that uses expected future earning from one’s educational attainment.

The introduction of rates of return inside the World Bank was no easy process. The internal fights by larger-than-life personalities were the stuff legends are made from. Yet, these disputes often go unnoticed, hidden behind glossy reports and confidence.

Today Stephen Heyneman takes us back in time when he introduced rates of return to the World Bank. He discusses how he used them to his advantage and how he ultimately lost his job because of them.

Stephen Heyneman is Professor Emeritus of international education policy at Peabody College, Vanderbilt University. He served the World Bank for 22 years between 1976 and 1998.