Albert Hirschman's Hiding Hand

Abstract

Albert Hirschman argued that planners in underdeveloped nations often benefit from what he called the Hiding Hand, which hides, and thus makes planners unable to anticipate, serious obstacles to development projects. The Hiding Hand turns out to be benevolent, because once the obstacles arise, human creativity, which is also unanticipated, comes to the rescue. Planners would not have authorized the relevant projects if the Hiding Hand had not hidden the obstacles, but fortunately, unanticipated solutions often emerge. This brief essay, the foreword to a new Brookings Press edition of Hirschman’s Development Projects Observed, explores the relationship between Hirschman’s Hiding Hand and behavioral findings involving unrealistic optimism and the planning fallacy. It also discusses the relationship between behavioral economics and Hirschman’s preferred approach, which did not involve identification of testable hypotheses, but instead narrative descriptions of surprising social mechanisms. It also notes that the Benevolent Hiding Hand has an evil sibling, the Malevolent Hiding Hand.