Contingent Learning in Times of Crisis: How Can Hirschman’s Hiding Hand Help Policymakers Face Current Pandemic?

During the current pandemic, I have been reflecting on the decision-making style of the Italian, and other European and North-American political leaders, mulling over how policy learning takes place in times of crisis. Contrary to national political stereotypes, I recurred to policy studies, cognitive psychology, and mostly Albert Hirschman’s theories to reconstruct how political leaders make decisions under critical conditions. In present pandemic times, Hirschman would emphasize errors and misperceptions in social policy design while focusing on the motivation that can help channel socially responsible behaviors to face risks and challenges. Finally, a quest for humility in the current uncertain situation would reflect Hirschman’s attention to policy assumptions against political rhetoric and intransigence.

Under critical conditions, policy studies posit that learning is contingent on those choices that political leaders make as they are caught up by surprise and face radical uncertainty. Unlike evidence-based policy-making — whereby policymakers learn what is needed to be done and then take action, drawing on available scientific evidence — during an unexpected crisis, policy learning follows a reversed sequence. Policymakers first react to the danger that jeopardizes human existence and, later, they verify whether or not their actions curbed the risk and avoided the peril. As policy initiatives can radically depart from previously experienced solutions, policy learning occurs once the feedback gradually confirms some successful associations between stimulus and reactions; hence a causal inference can be drawn.

Contingent learning is far from being a linear process. The confuse and frantic situations that lead politicians to make choices under stress can resonate with those mental shortcuts, which behavioral sciences eloquently define as cognitive heuristics. Accordingly, all human beings unconsciously recur to cognitive biases, which sometimes are useful to make sense of individual and collective choices, and some other times are misleading and even counterproductive. Cognitive heuristics explain how we cope with uncertainty and surprise through adaptive decisions that economize mental energy. And so, we can make sense of the sudden changes of direction, political reactions showed in dealing with COVID-19 emergency. From initially underestimating the risks, political leaders were caught by surprise and even desperation as they learnt about the pervasive circulation of the virus across workplaces, and households. In a blink of the eye, they inaugurated a new course of social expenditure for healthcare and internal demand support, promising to reverse a decade of welfare retrenchment throughout Europe and North America.

What can we learn from this policy response? Hirschman’s theory of the Hiding Hand suggests that two possible mistakes can affect social policy making. First, policymakers underestimate the obstacles that an intervention may encounter during implementation. Second, once faced with difficulties, policymakers underestimate their own abilities to bear the costs the program uncovers as it gets going. The Hiding Hand is a cognitive trap and typically involves the misperception that an intervention is replicable because the initiative was successfully implemented elsewhere; or because the intervention is seen as a piece of a broader program, or its benefits are expectedly higher than actually observable. The Hiding Hand can involve a series of operational variations that, depending on the case, can guide or constrain the progress of a program, but can also lead to failure.

In Italy, for instance, the government’s liquidity act providing loans for self-employed and firms in lockdown was flawed with the assumption that banks would manage lending without requiring collaterals and other property guarantees. The expected social relief associated with this policy initiative never materialized as loans did not reach families and workers who needed income support during quarantine. Furthermore, regional governments experimented with different healthcare approaches without benchmarking results. Some argued that the better performance of Veneto Region with respect to Lombardy — in terms of lesser contagion and fatality impact of the epidemic — was due to the Veneto place-based healthcare system as opposed to the Lombardy hospital-centered provision. Yet, during the most acute phase of contagion, political leaders in each region were not paying enough attention to what the others were doing…

What is worth emphasizing is that, besides errors and misperceptions, the Hiding Hand provides a powerful motivation to respond to the critical stimuli of the environment. As policymakers become aware of the complexity of the situation they face, they are urged to overcome their own mistakes. This motivational drive involves not only politicians but also individual or collective actors that, realizing how challenging it is to implement an initiative of change, endure the hardship to overcome the obstacles on their way. Throughout political arenas and social contexts, the Hiding Hand can help dig out those hidden and underutilized resources that can unleash vital energies for viable solutions. Only in the hindsight, will these solutions be assessed as effective actions, or discarded altogether.

To cope with the COVID-19 emergency, innumerable social initiatives are being continuously and tacitly tested across different contexts. Think of the extraordinary contribution of healthcare workers; the commitment of teachers; and of all those companies that have assured the operation of essential services. Quarantine has allowed us to reconcile smart working with family care, possibly strengthening the relationships between genders and generations. The importance of community welfare and social protection systems has grown and will likely gain further traction in the political agenda. And the greater collaboration among the member states of the EU heralds a possible reform of the role of the Union in a more federalist and democratic way.

Of course, the Hiding Hand is by no means the panacea to the current pandemic, but its motivational urge can mobilize an extraordinary reserve of creativity with unpredictable effects. As mentioned above, local self-organization encouraged problem solving through socially reproductive and responsible behaviors that can couple with top-down social spending programs, as planned by national and supranational institutions. From this standpoint, decision making does not take place only in parliaments or among narrow elites, who operate within institutional centers of political power. Decisions emerge at the grassroots level and learning involves not only leaders but also private organizations, local institutions, and individual citizens.

In this context, strengthening the dialogue between policymakers and experts is crucial. Simplistically assuming that technical and scientific knowledge feeds into policymaking can lead to unrealistic claims for a ‘one-fits-all’ problem solving approach. Whilst social policies need situational practice to respond to the often tacit needs of local communities, current political debates require pluralism and inclusive participation to integrate scientific evidence, practitioners’ and users’ experience, and citizens’ science to ensure diversity in the many task forces that have populated different policy sectors and institutional settings.

Greater humility would be highly valued, too!

Hirschman would encourage us to cultivate open-mindedness and critical thinking for a more democratic culture. All citizens ought to have the right to their own opinions, be ready to question them, and the right to do so ought to be recognized and protected. Yet, following Hirschman’s propensity to self-subversion — that is, questioning some of his major propositions on social change and economic development — also experts would benefit from reflecting on their own assumptions. Being aware of the errors and conflicts that tacitly exist among personal, professional, and public interests, the Hiding Hand can give us a hand to overcome our limits.

About the Author

Mita Marra is Associate Professor of Political Economy at the Department of Social Sciences, University of Naples “Federico II”.