James D. Wolfensohn, the urbane investment banker who helped right the finances of major U.S. cultural institutions, including Carnegie Hall and the Kennedy Center, then focused a life’s experience in politics and finance on remaking the World Bank during a tumultuous decade as its president, died Nov. 25 at his home in Manhattan. He was 86.

The Institute for Advanced Study, a theoretical research institute in Princeton, N.J., where Mr. Wolfensohn was a past board chairman, announced the death. His son, Adam Wolfensohn, said the cause was complications from pneumonia.

Mr. Wolfensohn was often characterized as a modern Renaissance man, as comfortable with the top figures of the arts world as he was with global business leaders and politicians. He was a native Australian who was an Olympic fencer in his youth. A classical music aficionado since his teens, he began cello lessons as an adult from the ailing star Jacqueline Du Pre.

In what he referred to in a Forbes interview as “a totally egocentric affair,” beginning at age 50 he would gather top musician friends at Carnegie Hall to join him for once-a-decade birthday concerts.

A onetime air-conditioning salesman, Mr. Wolfensohn climbed the world of high finance and joined the ranks of the global elite at the bond-trading house of Salomon Bros. in New York. At Salomon he was put in charge of advising Chrysler as it edged toward bankruptcy in the late 1970s, adding to the sense of economic malaise that, along with the oil embargoes and war in the Middle East, rattled the presidency of Jimmy Carter.

Helping arrange what was then the largest-ever corporate bailout in U.S. history, Mr. Wolfensohn was put in weekly contact with top officials such as Paul A. Volcker, then chairman of the Federal Reserve — further lengthening his list of contacts. He also proved his ability to work across borders, smoothing over a cultural rift between combustible Chrysler chief Lee Iacocca and the Japanese bankers who had lent the Detroit auto company $600 million.

After receiving $10 million when Salomon was sold, Mr. Wolfensohn started his own boutique consulting firm and gradually built a client list that included companies as diverse as Mercedes-Benz and Ralph Lauren.

But it was his work at the World Bank that defined his public life. After a middle-class upbringing in Australia, he wrote, early trips to India and Nigeria as an air-conditioning salesman had left “an indelible mark.”

“The inequity was so striking that I could hardly absorb what was in front of me,” he wrote in his 2010 memoir, “A Global Life.” “I had known what to expect intellectually but the reality was a shock.”

Changing the culture

at the World Bank

As a result, even as he built a global career in finance, he trained his sights on the World Bank presidency. He even acquired U.S. citizenship to qualify for the job — under an unwritten rule it is the U.S. president’s job to fill — and put his “golden Rolodex” to work lobbying President Bill Clinton when the position opened up in 1995 after the death of Lewis T. Preston, a former president of JPMorgan Chase.

Mr. Wolfensohn took over an institution besieged from both sides of the political spectrum. From the left, anti-globalization groups slammed the bank as little more than an extension of U.S. foreign policy, pressing private-sector economics and fiscal restraint on developing nations and ignoring local environmental and cultural concerns in the construction of large infrastructure projects. From the right, the World Bank was seen as an inefficient source of handouts to poorly performing countries.

Mr. Wolfensohn did not quickly endear himself to an organization that one of his former staffers likened to a “big battleship,” constrained by its own inertia.

He was apt to break into tears on trips to World Bank work sites in remote villages. He famously said the aim of the organization — a massive and staid bureaucracy — was to “put a smile on a child’s face.”

That comment made him seem a naif to bank staff more acclimated to the organization’s technocratic approach to economic development. Combined with a temper honed on Wall Street and often trained on those who had dissatisfied him, it meant a rocky transition from the private sector to an organization that thrived on international politesse. Mr. Wolfensohn was apt to holler at staff and was quick with threats of firing.

He also shattered some taboos — most notably the willingness within the bank to accept corruption as part of the cost of doing business in some parts of the world.

“When I arrived at the bank, I was told, ‘You don't talk about the C-word because it is a political issue. The bank is owned by governments, and your charter does not allow you to enter into the political field,’ ” Mr. Wolfensohn said in a 1999 speech in South Africa.

Among his first speeches as bank president was a landmark address on “the cancer of corruption,” in which he made the case that such practices were quite literally taking money away from the poor.

Mr. Wolfensohn’s work on corruption has endured. The bank now regularly debars firms and cancels projects when it finds that payoffs or bribes have been involved.

Wolfensohn biographer Sebastian Mallaby, in his book “The World’s Banker,” credits him with one other important change to the bank’s culture: focusing it more on the priorities of the developing countries that are borrowing the money and carrying out the work.

Partly in response to complaints from nongovernmental groups that felt the bank staff was heavy-handed in its demands, Mr. Wolfensohn pushed the organization to ensure that local governments and civic groups had influence over what the bank approved and how it carried out its work.

Top staff were encouraged to move from the headquarters in Washington to field offices. A new lexicon developed within the organization as projects were vetted more closely for environmental effects, larger projects that often disrupted villages fell into disfavor, and local priorities became more important.

The changes had a downside, according to critics who felt the organization by necessity became more bureaucratic and that its “safeguards” added time to an already lengthy project-approval process.

But Mr. Wolfensohn’s basic insight was sound.

“He was a relationship banker,” Mallaby said. “Wolfensohn turned the bank in that direction” by focusing on developing countries as clients to be courted and served, not pupils to be lectured. Mallaby said that Mr. Wolfensohn’s central point, credited with improving results on the ground, was that “it didn’t matter if a development project made sense if the country did not want to do it.”

He was adept at managing as well. Over strong misgivings among leaders of the developed world, he pushed through debt relief for the poorest nations. After the Sept. 11, 2001, terrorist attacks, he pressed the case that development had to be part of the response — drawing a link between poverty, failed states and terrorism.

The bank’s work in places such as Afghanistan expanded, the administration of President George W. Bush boosted foreign aid and widespread chatter of Mr. Wolfensohn’s likely ouster fell silent.

When he left the bank job in 2005, he had been invited into a former lion’s den — the annual meeting of Greenpeace — to give a keynote address, the World Bank’s main headquarters atrium was named in his honor and Bush tapped him to serve as the special envoy to the “quartet” of major nations then pursuing an Israeli-Palestinian peace plan.

Early days in finance

and fencing

James David Wolfensohn was born in Sydney on Dec. 1, 1933. His parents, Hyman Wolfensohn and the former Dora Weinbaum, had emigrated from London a few years earlier looking for economic opportunities.

Hyman Wolfensohn, known as Bill, had spent years as a personal secretary to banking scion James de Rothschild — the future World Bank president was named in Rothschild’s honor — and hoped his experience and connections would let him launch his own career.

He didn’t do well. In his autobiography, his son said his childhood was clouded by family tension over finances, a fact that shaped his approach to people. His father often avoided those who Mr. Wolfensohn later came to suspect were creditors. Even as a boy, he said, he developed a habit of studying any social setting to pick out potential allies and adversaries — a skill in “reading the room” that helped him in business.

From his mother, who sang on Australian radio and gave her son piano lessons, he developed a love of music. He was unabashed enough to take on female roles in Gilbert and Sullivan operettas in high school and was an avid symphony fan.

As a young man, Mr. Wolfensohn did not display any particular talents for academic success. He nearly flunked out of the University of Sydney, and one of his first investments was lost to a scam-artist “inventor.” His successes seemed to come not through natural genius but through intense application.

Given a chance to join the university fencing team, for example, he practiced hard enough to gain a spot on the Australian Olympic squad. He won two of his bouts at the 1956 Melbourne Games but lost a third because of what he called a mental mistake described in “A Global Life.” His opponent distracted him during a break in the match with a party invitation and promises of an introduction to an Israeli swimmer.

The Olympic training in fencing helped hone his sense of strategy. “Fencing is a little like chess,” Mr. Wolfensohn wrote. “You must project a few moves ahead and outthink your opponent.”

If Hyman Wolfensohn’s highbrow connections were only of limited help to himself, they were gold in the hands of his son. An early mentor and family friend, Australian jurist Julius Stone, helped James get an internship at a top Sydney law firm and admission to Harvard Business School — positions that Mr. Wolfensohn allowed he would not have gotten on the strength of his academic credentials alone. (He received the Harvard degree in 1959 after having earlier graduated from the University of Melbourne’s law school.)

While in Boston, he met Wellesley student Elaine Botwinick, whom he would later wed. His wife died in August. In addition to his son, of Brooklyn, survivors include two daughters, Sara Wolfensohn Mayle of Cambridge, Mass., and Naomi Wolfensohn of Long Island City, N.Y.; and seven grandchildren.

After the stint selling air conditioners in Africa and Asia, he returned to Australia for jobs at different investment houses before graduating to the financial firms of London and New York.

Restoring cultural landmarks

Beginning as a dealmaker at investment banking firms such as Schroders in London, he moved in 1977 to Salomon in New York. He ensconced himself in New York’s cultural firmament, befriending people such as conductor and composer Leonard Bernstein.

In 1980, Mr. Wolfensohn became chairman of Carnegie Hall and, after contributing $1 million, raised $60 million from his friends to renovate the venerable performance space. During his decade as chairman, he was credited with stabilizing the institution’s finances.

In 1990 he was recruited to do the same for the Kennedy Center, suffering at the time from the sort of budget shortfalls that had beset Carnegie. In his memoir, he referred to the institution as a “white elephant,” with outdated equipment, a leaky roof, cracking granite and a hidebound approach to programming.

He pushed crowd-pleasing programs — productions such as Andrew Lloyd Webber’s “Cats” and “The Phantom of the Opera” — to fill the seats and lobbied Congress for a boost in funding. His ideas, particularly about programming, clashed with some of the center’s longtime employees and, according to news reports at the time, prompted longtime artistic director Marta Istomin to resign in 1990.

During his five years guiding the Kennedy Center, he was said to have restored the physical building and the center’s finances, even if he fell short of some of his larger aspirations. At the time, he was criticized for dividing his time too thinly between his work in Washington, his private investment firm and other undertakings.

Mr. Wolfensohn, who received an honorary knighthood from Queen Elizabeth II in 1995 for his contribution to the arts, served on corporate and charitable boards.

He admitted to an inability to prioritize, turn down an invitation or reject a request to serve on such boards. Colleagues at the World Bank noted that they would load him down with reading, only to see him disappear into his office and spend the next hours on the phone.

“What can I tell you? You get drawn into things,” he once told an interviewer. “Everything is interesting.”