Last week, Bolivian President Gonzalo Sánchez de Lozada visited the Kennedy School of Government and gave a talk in which he reflected on the challenges his administration has faced in trying to bring about major changes in one of Latin America's poorest countries.

Jeffrey D. Sachs, director of the Harvard Institute for International Development (HIID), introduced the president as one of Latin America's boldest and most creative leaders.

The talk, "The Problems of Change in Bolivia," was cohosted by HIID, the Kennedy School's Institute of Politics, the David Rockefeller Center for Latin American Studies, the Edward S. Mason Program of the Kennedy School and HIID, and Boston University.

Sánchez de Lozada's links to Harvard extend back many years. During the president's youth, his family lived in exile for a time in the United States. For at least two of these summers, he lived in Cambridge while his father taught political science at Harvard. In the mid-1970s, as head of one of Bolivia's most important medium-scale mines, Sánchez de Lozada came in contact with Harvard faculty members Richard Musgrave and HIID Fellow Malcolm Gillis, whose separate missions focused on tax reforms in Bolivia.

From the early 1980s on, Bolivian students started to come to the Kennedy School for advanced degrees and training. And in 1985 the Bolivian government invited Professor Sachs of the Economics Department to Bolivia to help curb hyperinflation and stabilize the economy. Subsequent collaborative work between Bolivian policymakers, Sachs, who later became an adviser to then Minister of Planning Sánchez de Lozada, and his students put an end to the macroeconomic chaos and helped launch Bolivia on a path of economic growth and political stability.

Sachs, who is now Galen L. Stone Professor of International Trade as well as director of HIID, has high regard for the president's political leadership skills and believes that Sánchez de Lozada and his colleagues deserve the credit for the economic turnaround: "They were the main authors of economic reforms for Bolivia . . . and had played an important role in the return to democracy. . . . My role was partly to motivate the idea of quick stability, and to help with technical aspects of the reform."

Building on Sachs' work in the mid-1980s, faculty and students from many Harvard departments have been working through HIID with top Bolivian government officials to promote growth with equity. HIID has provided technical assistance to and helped build research capacity in the Economic Policy Analysis Unit (or Unidad de Análisis de Políticas Económicas, UDAPE), a public think tank that analyzes government policies and serves as a watchdog of the Bolivian economy. Inspired by the success of UDAPE, several Latin American countries have set up similar institutions.

With macroeconomic stability well established, the focus of HIID's technical assistance in Bolivia has shifted to local education, health, and poverty reduction. In the early 1990s, with funds from the United States Agency for International Development, HIID helped the Bolivian government set up the Unidad de Análisis de Políticas Sociales (UDAPSO), a sister institution to UDAPE that focuses on social issues.

At present, HIID's policy research in Bolivia focuses on monitoring and evaluating some of Sánchez de Lozada's most important reforms, such as those dealing with political development, popular participation, decentralization, education, land tenure, and privatization/capitalization. Through collaborative research with faculty and students from Harvard, Bolivian analysts are collecting primary data and information and analyzing the effects of the reforms as they unfold.

In 1994, in order to build the cadre of trained policymakers that staff public institutions, Merilee Grindle, Edward S. Mason Professor of International Development at the Kennedy School and Institute Fellow at HIID, and Mary Hilderbrand, HIID Research Associate, helped set up two master's programs -- one in public policy and management and the other in auditing and financial control -- at the Catholic University of La Paz. Modeled after the Kennedy School's master's degree programs, the Catholic University programs focus on sharpening problem-solving in a management-oriented setting and have attracted some of the brightest and most committed students in Bolivia. The program produced its first graduating class in December 1996, and many of its alumni are now in senior positions in the public sector.

During a private seminar at Harvard and in his speech at the Kennedy School, Sánchez de Lozada discussed the successes of his reforms, while recognizing that much still remains to be done. As one example of an important success, the Law of Popular Participation and Decentralization created 311 municipalities and devolved to them political power and 20 percent of national tax revenues overnight, a bold move in a country known for its bias in favor of the central government. Polls show that the Popular Participation law enjoys wide acceptance among the public. Although the sale of government companies and the placement of the proceeds into pension funds earmarked for all Bolivians was at first criticized by the World Bank, this act has now won widespread support.

However, other reforms have not fared as well as Popular Participation, decentralization, or capitalization. Today, Bolivia is in the process of implementing its third major education reform program of the century. Focused on primary and rural education, this effort promotes sweeping changes and is an important first step in modernizing Bolivian education. Similarly, reforms in the countryside are slow to develop. The country has yet to set up a first-rate system of agricultural research and extension, even though it has passed an important new land tenure law.

Sánchez de Lozada's reforms have won him widespread recognition. Aside from an honorary doctorate that he earned from Boston University on this visit, he also recently received an honorary degree from Kyoto University as well as the American Leadership Award from the Institute of the Americas. On Aug. 6, 1997, President Sánchez de Lozada will step down from office, because the Bolivian constitution prohibits its president from holding two consecutive terms in office. Nonetheless, it is said that he may plan to run again in 2002.