Hostname: page-component-669899f699-rg895 Total loading time: 0 Render date: 2025-04-25T18:51:18.931Z Has data issue: false hasContentIssue false
  • English
  • Français

A Test of Hirschman’s Hiding Hand Principle in World Bank-Financed Hydropower Projects

Published online by Cambridge University Press:  22 May 2023

Godwin Olasehinde-Williams Open the ORCID record for Godwin Olasehinde-Williams [Opens in a new window]  and
Glenn P. Jenkins
Godwin Olasehinde-Williams*
Affiliation:
Department of Economics, Istanbul Ticaret University, Istanbul, Turkey
Glenn P. Jenkins
Affiliation:
Department of Economics, Queen’s University, Kingston, ON, Canada
*
Corresponding author: Godwin Olasehinde-Williams; Email: goowilliams@ticaret.edu.tr
Get access Rights & Permissions [Opens in a new window]

Abstract

This study is an attempt to determine whether the need to get hydropower project appraisals perfectly right during the pre-construction phase, so as to prevent significant overruns along with benefit shortfalls, should supersede the need to deliver projects at the earliest possible time so as to meet the needs of the people. To achieve the study objective, we test whether the Hiding Hand principle is predominantly benevolent or malevolent. We argue that if the Hiding Hand is benevolent, then project stakeholders are better off focusing on the quick delivery of power projects; however, if it is malevolent, then more attention should be given to perfecting project appraisals. It transpires from the statistical analysis that the Benevolent Hiding Hand dominates the Malevolent Hiding Hand in the selected World Bank-financed hydropower projects (33% v. 21%), and that ultimately, 75% of the projects were even more successful than anticipated—while 25% of the projects failed. Our findings further show that while a total loss of 2.335 billion USD in the sampled dams was caused by the Malevolent Hiding Hand, 11.259 billion USD was gained as a result of the Benevolent Hiding Hand. The predominance of the Benevolent Hiding Hand justifies placing some weight on proceeding with hydropower projects that show significant promise even if all the implantation risks are not fully quantified at the appraisal stage, especially in developing countries.

Keywords

Albert O. HirschmanHiding Hand principlehydropowerignoranceWorld BankD61D91O13
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 14 , Issue 2 , Summer 2023 , pp. 298 - 317
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Society for Benefit-Cost Analysis

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Adelman, J. 2013. Worldly Philosopher: The Odyssey of Albert O. Hirschman. Princeton and Oxford: Princeton University Press.Google Scholar
Alacevich, M. (2015). “Albert Hirschman Observed. Afterword.” In Hirschman, A. O. (Ed.), Development Projects Observed (3rd ed.). Washington, DC: Brookings Institution.Google Scholar
Awojobi, O. and Jenkins, G. P.. 2015. “Were the Hydro Dams Financed by the World Bank from 1976 to 2005 Worthwhile?” Energy Policy, 86: 222–232.CrossRefGoogle Scholar
Bacon, R. W. and Besant-Jones, J. E.. 1998. “Estimating Construction Costs and Schedules: Experience with Power Generation Projects in Developing Countries.” Energy Policy, 26(4): 317–333.CrossRefGoogle Scholar
Baurzhan, S., Jenkins, G. P., and Olasehinde-Williams, G. O.. 2021. “The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015.” Energies, 14(9): 2673.CrossRefGoogle Scholar
Braeckman, J. P. and Guthrie, P. 2015. “Loss of Value: Effects of Delay on Hydropower Stakeholders.” In Proceedings of the Institution of Civil Engineers-Engineering Sustainability (Vol. 169, No. 6): pp. 253–264). London: Thomas Telford Ltd.Google Scholar
Cracknell, B. 1984. “Learning Lessons from Experience: The Role of Evaluation in the Administration of the UK Aid Programme.” Public Administration and Development, 4(1): 15–20.CrossRefGoogle Scholar
De Wit, A. 1988. “Measurement of Project Success.” International Journal of Project Management, 6(3): 164–170.CrossRefGoogle Scholar
Dhakal, D. N. S. and Jenkins, G. P.. 2013. “Risk Sharing in Hydropower Development: Case Study of the Chukha Hydel Project in Bhutan.” Water Policy, 15(S1): 109–125.CrossRefGoogle Scholar
Dorner, D. 1997. The Logic of Failure: Recognizing and Avoiding Error In Complex Situations. New York: Basic Books.Google Scholar
Flyvbjerg, B. 2005. “Design by Deception: The Politics of Megaproject Approval.” Harvard Design Magazine, Spring/Summer, 22: 50–59.Google Scholar
Flyvbjerg, B. 2016. “The Fallacy of Beneficial Ignorance: A Test of Hirschman’s Hiding Hand.” World Development, 84: 176–189.CrossRefGoogle Scholar
Flyvbjerg, B. and Sunstein, C. R.. 2016. “The Principle of the Malevolent Hiding Hand; or, the Planning Fallacy Writ Large.” Social Research, 83(4): 979–1004.CrossRefGoogle Scholar
Flyvbjerg, B., Holm, M. S., and Buhl, S.. 2002. “Underestimating Costs in Public Works Projects: Error or Lie?” Journal of the American Planning Association, 68(3): 279–295.CrossRefGoogle Scholar
Flyvbjerg, B. (2009). Survival of the unfittest: why the worst infrastructure gets built–and what we can do about it. Oxford review of economic policy, 25(3), 344-367.CrossRefGoogle Scholar
Gasper, D. 1986. “Programme Appraisal and Evaluation: The Hiding Hand and Other Stories.” Public Administration and Development, 6(4): 467–474.CrossRefGoogle Scholar
Gil, N., Stafford, A., and Musonda, I. (Eds.). 2019. Duality by Design: The Global Race to Build Africa’s Infrastructure. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Gladwell, M. 2013. “The Gift of Doubt: Albert O. Hirschman and the Power of Failure.” The New Yorker, 24.Google Scholar
Hayek, F. A. 1945. “The Use of Knowledge in Society.” The American Economic Review, 35(4): 519–530.Google Scholar
Hirschman, A. O. 1967. Development Projects Observed. Washington, DC: Brookings Institution.Google Scholar
Hirschman, A. O. 2015. Development Projects Observed, Third Edition Published as a Brookings Classic with a New Foreword by Cass R. Sunstein and a New Afterword by Michele Alacevich. Washington, DC: Brookings Institution.Google Scholar
Ika, L. A. (2009). Project success as a topic in project management journals. Project management journal, 40(4), 6-19.CrossRefGoogle Scholar
Ika, L. A. 2012. “Project Management for Development in Africa: Why Projects are Failing and What Can Be Done About It.” Project Management Journal, 43(4): 27–41.CrossRefGoogle Scholar
Ika, L. A. (2015). Opening the black box of project management: Does World Bank project supervision influence project impact?. International Journal of Project Management, 33(5), 1111-1123.CrossRefGoogle Scholar
Ika, L. A. 2018. “Beneficial or Detrimental Ignorance: The Straw Man Fallacy of Flyvbjerg’s Test of Hirschman’s Hiding Hand.” World Development, 103: 369–382.CrossRefGoogle Scholar
Ika, L. A. and Donnelly, J.. 2017. “Success Conditions for International Development Capacity Building Projects.” International Journal of Project Management, 35(1): 44–63.CrossRefGoogle Scholar
Ika, L. A. and Hodgson, D.. 2014. “Learning from International Development Projects: Blending Critical Project Studies and Critical Development Studies.” International Journal of Project Management, 32(7): 1182–1196.CrossRefGoogle Scholar
Ika, L. and Feeny, S. 2022. “Optimism Bias and World Bank Project Performance.” The Journal of Development Studies, 58(12): 2604–2623.CrossRefGoogle Scholar
Ika, L. A. and Söderlund, J.. 2016. “Rethinking Revisited: Insights from an Early Rethinker.” International Journal of Managing Projects in Business, 9(4): 931–954.CrossRefGoogle Scholar
Jenkins, G., Olasehinde-Williams, G., and Baurzhan, S.. 2022. “Is There a Net Economic Loss from Employing Reference Class Forecasting in the Appraisal of Hydropower Projects?” Renewable and Sustainable Energy Reviews, 159: 112218.CrossRefGoogle Scholar
Kahneman, D. 2011. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux.Google Scholar
Kacou, K. P., Ika, L. A., and Munro, L. T.. 2022. “Fifty Years of Capacity Building: Taking Stock and Moving Research Forward 1.” Public Administration and Development, 42(4): 215–232.CrossRefGoogle Scholar
Krugman, P. 1994. The Fall and Rise of Development Economics. Rethinking the Development Experience: Essays Provoked by the Work of Albert O. Hirschman: 39–58. Washington, DC: Brookings Institution.Google Scholar
Love, P. E. and Ahiaga-Dagbui, D. D.. 2018. “Debunking Fake News in a Post-Truth Era: The Plausible Untruths of Cost Underestimation in Transport Infrastructure Projects.” Transportation Research Part A: Policy and Practice, 113: 357–368.Google Scholar
Love, P. E., Ika, L. A., and Ahiaga-Dagbui, D. D.. 2019. “On De-Bunking ‘Fake News’ in a Post Truth Era: Why Does the Planning Fallacy Explanation for Cost Overruns Fall Short?” Transportation Research Part A: Policy and Practice, 126: 397–408.Google Scholar
Offe, C. 2013. “Getting Ahead by Trespassing-Jeremy Adelman, Worldly Philosopher. The Odyssey of Albert O. Hirschman (Princeton, Princeton University Press 2013).” European Journal of Sociology/Archives Européennes de Sociologie, 54(3): 583–591.CrossRefGoogle Scholar
Picciotto, R. 1994a. Visibility and Disappointment: The New Role of Development Evaluation. Rethinking the Development Experience: Essays Provoked by the Work of Albert O. Hirschman: 210–230. Washington, DC: Brookings Institution.Google Scholar
Picciotto, R. (1994b). “Marseille Discussion: Learning Via the Hiding Hand.” In Appendix A of Rodwin, Lloyd and Schön, Donald A. (Eds.) Rethinking the Development Experience: Essays Provoked by the Work of Albert O. Hirschman: 301–304. Washington, DC: Brookings Institution.Google Scholar
Picciotto, R. 2015. “Hirschman’s Ideas as Evaluation Tools.” Journal of Multidisciplinary Evaluation, 11(24): 1–11.CrossRefGoogle Scholar
Rondinelli, D. A. 1976. “Why Development Projects Fail: Problems of Project Management in Developing Countries.” Project Management Quarterly, 7: 10–15.Google Scholar
Schön, D. A. 1994. Hirschman’s Elusive Theory of Social Learning. Rethinking the Development Experience: Essays Provoked by the Work of Albert O. Hirschman: 67–95. Washington DC and Cambridge, MA: The Brookings Institution and The Lincoln Institute of Land Policy.Google Scholar
Shenhar, A. J. and Dvir, D.. 2007. Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation. Brighton, Massachusetts: Harvard Business Review Press.Google Scholar
Singer, H. W. 1969. “Albert O. Hirschman: Development Projects Observed.” Institute of Development Studies Bulletin, 1(3): 22–25.CrossRefGoogle Scholar
Streeten, Paul P., 1984, “Comment,” in Meier, Gerald M. and Seers, Dudley, eds., Pioneers in Development (New York: World Bank and Oxford University Press.Google Scholar
Sunstein, C. R. 2015. “Albert Hirschman’s Hiding Hand.” In Foreword to Albert O. Hirschman. Development Projects Observed (3rd ed.). Washington, DC: Brookings Institution.Google Scholar
Wachs, M. 1990. “Ethics and Advocacy in Forecasting for Public Policy.” Business & Professional Ethics Journal, 9: 141–157.CrossRefGoogle Scholar
Zuker, R. C. and Jenkins, G. P.. 1984. Blue Gold: Hydro-Electric Rent in Canada. Ottawa: Economic Council of Canada.Google Scholar