IDEAS home Printed from https://ideas.repec.org/p/qed/dpaper/4603.html
   My bibliography  Save this paper

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

Author

Listed:
  • Godwin Olasehinde-Williams

    (Department of Economics, Istanbul Ticaret University, Turkey)

  • Glenn P. Jenkins

    (Department of Economics, Queens University, Kingston, Ontario, Canada and Cambridge Resources International Inc.)

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 quick delivery of power projects, but 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 projects were even more successful than anticipated—while 25% of projects failed. Our findings further showed 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 shows significant promise even if all the implantation risks are not fully quantified at the appraisal stage, especially in developing countries.

Suggested Citation

  • Godwin Olasehinde-Williams & Glenn P. Jenkins, 2023. "A Test of Hirschman's Hiding Hand Principle in World Bank-Financed Hydropower Projects," Development Discussion Papers 2023-05, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4603
    as

    Download full text from publisher

    File URL: http://cri-world.com/publications/qed_dp_4603.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Awojobi, Omotola & Jenkins, Glenn P., 2015. "Were the hydro dams financed by the World Bank from 1976 to 2005 worthwhile?," Energy Policy, Elsevier, vol. 86(C), pages 222-232.
    2. Flyvbjerg, Bent, 2016. "The Fallacy of Beneficial Ignorance: A Test of Hirschman’s Hiding Hand," World Development, Elsevier, vol. 84(C), pages 176-189.
    3. Kablan P. Kacou & Lavagnon A. Ika & Lauchlan T. Munro, 2022. "Fifty years of capacity building: Taking stock and moving research forward," Public Administration & Development, Blackwell Publishing, vol. 42(4), pages 215-232, October.
    4. Jeremy Adelman, 2013. "Worldly Philosopher: The Odyssey of Albert O. Hirschman," Economics Books, Princeton University Press, edition 1, number 9935.
    5. 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.
    6. Saule Baurzhan & Glenn P. Jenkins & Godwin O. Olasehinde-Williams, 2021. "The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015," Energies, MDPI, vol. 14(9), pages 1-22, May.
    7. Bacon, Robert W & Besant-Jones, John E, 1998. "Estimating construction costs and schedules: Experience with power generation projects in developing countries," Energy Policy, Elsevier, vol. 26(4), pages 317-333, March.
    8. Saule Baurzhan & Glenn Jenkins & Godwin O. Olasehinde-Williams, 2021. "The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015," Working Paper 1463, Economics Department, Queen's University.
    9. Lavagnon Ika & Simon Feeny, 2022. "Optimism Bias and World Bank Project Performance," Journal of Development Studies, Taylor & Francis Journals, vol. 58(12), pages 2604-2623, December.
    10. Glenn Jenkins & RICHARD ZUKER, 1984. "Blue Gold: Hydro-Electric Rent In Canada," Development Discussion Papers 1984-01, JDI Executive Programs.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Love, Peter E.D. & Ika, Lavagnon A. & Ahiaga-Dagbui, Dominic 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, Elsevier, vol. 126(C), pages 397-408.
    2. Jenkins, G. & Olasehinde-Williams, G. & 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, Elsevier, vol. 159(C).
    3. Saule Baurzhan & Glenn Jenkins & Godwin O. Olasehinde-Williams, 2021. "The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015," Working Paper 1463, Economics Department, Queen's University.
    4. Saule Baurzhan & Glenn P. Jenkins & Godwin O. Olasehinde-Williams, 2021. "The Economic Performance of Hydropower Dams Supported by the World Bank Group, 1975–2015," Energies, MDPI, vol. 14(9), pages 1-22, May.
    5. Glenn P. Jenkins & Saule Baurzhan & Author-Name: Godwin O-Williams, 2018. "Evaluation of the Economic Performance of Hydropower Developments Supported by the World Bank Group 1975 to 2015," Development Discussion Papers 2018-06, JDI Executive Programs.
    6. Herve Kabanda & Alex Romard & Fuze Yurtsever & Anjali Wadhera & Joshua Andrews & Craig Merrett, 2021. "Construction Time Estimation Function for Canadian Utility Scale Power Plants," Energies, MDPI, vol. 14(17), pages 1-16, August.
    7. Awojobi, Omotola & Jenkins, Glenn P., 2015. "Were the hydro dams financed by the World Bank from 1976 to 2005 worthwhile?," Energy Policy, Elsevier, vol. 86(C), pages 222-232.
    8. 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.
    9. Kirchherr, Julian & Ahrenshop, Mats-Philip & Charles, Katrina, 2019. "Resettlement lies: Suggestive evidence from 29 large dam projects," World Development, Elsevier, vol. 114(C), pages 208-219.
    10. Love, Peter E.D. & Sing, Michael C.P. & Ika, Lavagnon A. & Newton, Sidney, 2019. "The cost performance of transportation projects: The fallacy of the Planning Fallacy account," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 1-20.
    11. Flyvbjerg, Bent & Ansar, Atif & Budzier, Alexander & Buhl, Søren & Cantarelli, Chantal & Garbuio, Massimo & Glenting, Carsten & Holm, Mette Skamris & Lovallo, Dan & Molin, Eric & Rønnest, Arne & Stewa, 2019. "On de-bunking “Fake News” in the post-truth era: How to reduce statistical error in research," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 409-411.
    12. Anuja Shaktawat & Shelly Vadhera, 2021. "Risk management of hydropower projects for sustainable development: a review," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 45-76, January.
    13. Room, Graham, 2018. "The Hiding Hand: A Rejoinder to Flyvbjerg on Hirschman," World Development, Elsevier, vol. 103(C), pages 366-368.
    14. Alexander Budzier & Bent Flyvbjerg & Andi Garavaglia & Andreas Leed, 2019. "Quantitative Cost and Schedule Risk Analysis of Nuclear Waste Storage," Papers 1901.11123, arXiv.org.
    15. Bent Flyvbjerg & Allison Stewart & Alexander Budzier, 2016. "The Oxford Olympics Study 2016: Cost and Cost Overrun at the Games," Papers 1607.04484, arXiv.org.
    16. DeMartino, George & Grabel, Ilene & Scoones, Ian, 2024. "Economics for an uncertain world," World Development, Elsevier, vol. 173(C).
    17. Banfi, Silvia & Filippini, Massimo & Mueller, Adrian, 2005. "An estimation of the Swiss hydropower rent," Energy Policy, Elsevier, vol. 33(7), pages 927-937, May.
    18. Andrea Ginzburg, 2014. "L’attualità di un dissenziente: l’idea di sviluppo in Albert O. Hirschman," Moneta e Credito, Economia civile, vol. 67(266), pages 205-226.
    19. Andrés Álvarez & Andrés M. Guiot-Isaac & Jimena Hurtado, 2017. "The Quarrel of Development Experts: Lauchlin Currie and Albert O. Hirschman in Colombia," Documentos CEDE 15628, Universidad de los Andes, Facultad de Economía, CEDE.
    20. Gholamreza Dehdasht & Rosli Mohamad Zin & M. Salim Ferwati & Mu’azu Mohammed Abdullahi & Ali Keyvanfar & Ronald McCaffer, 2017. "DEMATEL-ANP Risk Assessment in Oil and Gas Construction Projects," Sustainability, MDPI, vol. 9(8), pages 1-24, August.

    More about this item

    Keywords

    Albert O. Hirschman; Hiding Hand principle; Ignorance; Hydropower; World Bank;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:dpaper:4603. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.