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Algorithm design is a challenging intellectual activity that provides a rich source of observation and a test domain for a theory of problem-solving behavior. This paper describes a theory of the algorithm design process based on observations of human design and also outlines a framework for automatic design. The adaptation of the theory of human design to a framework for automation in the DESIGNER system helps us understand human design better, and the implementation process helps validate the framework. Issues discussed in this paper include the problem spaces used for design, the loci of knowledge and problem-solving power, and the relationship to other methods of algorithm design and to automatic programming as a whole.