Did Megaproject Research Pioneer Behavioral Economics? The Case of Albert O. Hirschman

Abstract

With Albert O. Hirschman, project management scholarship has what it lacks the most: an eminent intellectual and social scientist who has thought long and hard about project management, and especially the management of large transformative projects. Cass Sunstein, co-author of Nudge and a key contributor to behavioral economics, distinguishes Hirschman as an early behavioral economist and says that his main contribution to project management, the book Development Projects Observed, "can plausibly be counted as a work in behavioral economics." This chapter tests Sunstein's claim by assessing Hirschman's work in major project management. The chapter asks what we can learn from Hirschman, as scholars, policy makers, and project leaders. The focus is on Hirschman's principle of the Hiding Hand, first described in Development Projects Observed, because this is rightly considered his largest idea on project management and one of his main contributions to economics and social science.

Keywords: Megaprojects, behavioral economics, behavioral science, ignorance, creative error, the principle of the Hiding Hand, Albert O. Hirschman, megaproject management, project management, program management, decision making, cost-benefit analysis, welfare economics, risk management