We were introduced to A.O. Hirschman’s concept of Exit, Voice and Loyalty in our second semester microeconomics class, and Hirschman’s well-received biography was published shortly afterwards. I put these two books down on my ever-expanding graduate school inspired reading list, and I finally read my first Hirschman book, “Development Projects Observed", this semester. This book was released in 1967 and was a review of 11 large infrastructure projects funded by the World Bank. Hirschman was a development economist, and the book is an analysis of lessons learned from observing the design and execution of these projects. Malcolm Gladwell says of Hirschman’s writing that “his subject was economics but his spirit was literary”. Hirschman quotes philosophers like Nietzsche, Sorel and Kolakowski to explain project behavior.
The projects were chosen because they were diverse in location and type and were operational for several years. However, the book is not an individualized assessment of all 11 projects. Rather, Hirschman’s observations are intended to help develop a comparative framework to understand what drives the success and failure of large projects in general.
We tend to underestimate the complications that will arise with large scale projects. Consider the delays in construction of the new Bay Bridge as a recent and local example. If we were blessed with perfect foresight, perhaps large projects would never be undertaken. Hirschman’s Hiding Hand theory explains how this short sightedness is actually a good thing. The Hiding Hand hides the large list of things that could go wrong and makes it seem like project goals can be achieved. Hirschman, in a modification of Marx’s sentence says that “Mankind always takes up such problems as it thinks it can solve”. The Hiding Hand pushes people to find creative solutions for unanticipated problems.