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Beneficial or Detrimental Ignorance: The Straw Man Fallacy of Flyvbjerg’s Test of Hirschman’s Hiding Hand

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  • Ika, Lavagnon A.

Abstract

In a recent paper in this journal, “The Fallacy of Beneficial Ignorance: A Test of Hirschman’s Hiding Hand”, Professor Bent Flyvbjerg claims that there is no such thing as beneficial ignorance and that ignorance is detrimental to project success. Moreover, he argues that if Hirschman’s principle of the Hiding Hand were correct, then benefit overruns would exceed cost overruns. Thus, with a statistical test, he demonstrates that the Hiding Hand is in fact less common than its “evil twin”, the Planning Fallacy. In this rejoinder, the author shows that Flyvbjerg’s test is built on a straw man fallacy and that he fails to refute the Hiding Hand. Contrary to Flyvbjerg—who focuses on the narrow costs and benefits—this paper provides evidence that while the Hiding Hand is found among projects that are project management failures but project successes, the Planning Fallacy fits with projects that are both project management and project failures. On that basis, the author analyzes a sample of 161 World Bank-funded projects of different types and finds that the Hiding Hand prevails. While future research should ascertain this finding, the author then points out the methodological limitations of Flyvbjerg’s test. Indeed, it is ironic that the Hiding Hand, a principle crafted against the very idea of cost–benefit analysis, is refuted on that very basis. Even worse, Flyvbjerg, in his cost–benefit analysis, ignores the full life-cycle project costs and benefits, the unintended project effects, the difficulties, and problem-solving abilities so dear to Hirschman, and, thus, treats the management of projects as a kind of “black box”. Finally, the author submits that Hirschman was a behavioral project theorist, and argues that it is more important to shed light on the circumstances where the Hiding Hand works than to question whether the principle of the Hiding Hand is right.

Suggested Citation

  • Ika, Lavagnon A., 2018. "Beneficial or Detrimental Ignorance: The Straw Man Fallacy of Flyvbjerg’s Test of Hirschman’s Hiding Hand," World Development, Elsevier, vol. 103(C), pages 369-382.
  • Handle: RePEc:eee:wdevel:v:103:y:2018:i:c:p:369-382
    DOI: 10.1016/j.worlddev.2017.10.016
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    References listed on IDEAS

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    1. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    2. Bent Flyvbjerg, 2009. "Survival of the unfittest: why the worst infrastructure gets built--and what we can do about it," Oxford Review of Economic Policy, Oxford University Press, vol. 25(3), pages 344-367, Autumn.
    3. Stewart, Frances, 1975. "A note on social cost-benefit analysis and class conflict in LDCs," World Development, Elsevier, vol. 3(1), pages 31-39, January.
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    5. Stewart, Frances, 1978. "Social cost-benefit analysis in practice: Some reflections in the light of case studies using Little-Mirrlees techniques," World Development, Elsevier, vol. 6(2), pages 153-165, February.
    6. Bent Flyvbjerg, 2013. "Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View," Papers 1302.2544, arXiv.org.
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    8. Isham, Jonathan & Kaufmann, Daniel & Pritchett, Lant H, 1997. "Civil Liberties, Democracy, and the Performance of Government Projects," World Bank Economic Review, World Bank Group, vol. 11(2), pages 219-242, May.
    9. Bent Flyvbjerg, 2014. "What You Should Know About Megaprojects, and Why: An Overview," Papers 1409.0003, arXiv.org.
    10. Alacevich, Michele, 2014. "Visualizing Uncertainties, Or How Albert Hirschman And The World Bank Disagreed On Project Appraisal And What This Says About The End Of “High Development Theory”," Journal of the History of Economic Thought, Cambridge University Press, vol. 36(02), pages 137-168, June.
    11. Naresh K. Malhotra & Sung S. Kim & Ashutosh Patil, 2006. "Common Method Variance in IS Research: A Comparison of Alternative Approaches and a Reanalysis of Past Research," Management Science, INFORMS, vol. 52(12), pages 1865-1883, December.
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