"There should be such a rigorous line betweenthese two activities that one could never evenconsider that one came close to approaching thatline," Sachs said. "That certainly is theappropriate standard."
Due in part to HIID's recent difficulties, theUniversity is restructuring its developmentactivities, putting an increased emphasis on theacademic side.
The new project, the Center for InternationalDevelopment, arose from an agreement between Sachsand KSG Dean Joseph S. Nye Jr. that Harvard neededto add an academic focus to its development work.
"The way that HIID worked, which wasessentially to work on specific programs, simplydid not provide an organization or financial meansfor the kind of scholarship that needs to be doneon development," Sachs said.
But both Sachs and Nye said that the practicalknowledge from HIID projects, which will now bescattered to offices around the University,supplements the new focus on scholarship.
But CID and HIID have many similarities. Bothwill be directed by Sachs. CID's funding will comefrom both HIID and KSG, which will jointly operatethe new center. And CID will occupy HIID's formerKSG offices.
"Harvard is expanding its work in developmentby creating two new parts," Sachs said. "[CID]adds a teaching and research institute to theadvisory portion."
The KSG will also have a new masters degreetrack in international development by September1999 to further supplement the area of study.
According to Fred Schauer, academic dean, CIDwill be more attuned than HIID to the KennedySchool's culture, which is structured aroundresearch centers but lacks a separate division ininternational development.
"There are a fair number of faculty members inthe Kennedy School for whom the CID will be anatural home," Schauer said. Two newprofessorships will be made possible by the newcenter, according to a press release. The newcenter comes a year after HIID's Russianactivities faced serious government scrutiny.
Between 1992 and 1997, the financial support ofthe U.S. Agency for International Development(USAID) sponsored HIID's design of Russia'scapital markets and legal system. HIID lost thesefunds when government investigators uncoveredevidence suggesting that these grants personallybenefited Harvard affiliates working for HIID.
Jonathan Hay, the former director of HIID'sMoscow office, allegedly ordered employees toprovide investment services for the spouse ofProfessor of Economics Andrei Shleifer '82, whowas the director of the Russia project.
Both Hay and Shleifer were dismissed from theRussia project, although Shleifer remains atenured professor.
KSG officials were quick to dissociate the newcenter from HIID. While HIID reports to theUniversity provost, CID will be under the KSGdean.
"Although physically located in the vicinity,HIID was not and is not related to the KennedySchool," Schauer said.
The U.S. Attorney's office in Boston has beenconducting the investigation of HIID since lastspring. Sarah Blume, the attorney in charge of theinvestigation, refused to comment on HIID. USAIDspokesperson Ernie Gibble also declined to respondto the new allegations