The use of machine learning as an input into decision-making is on the rise, owing to its ability to uncover hidden patterns in large data and improve prediction accuracy. Questions have been raised, however, about the potential distributional impacts of these technologies, with one concern being that they may perpetuate or even amplify human biases from the past. Exploiting detailed credit file data for 800,000 UK borrowers, we simulate a switch from a traditional (logit) credit scoring model to ensemble machine-learning methods. We confirm that machine-learning models are more accurate overall. We also find that they do as well as the simpler traditional model on relevant fairness criteria, where these criteria pertain to overall accuracy and error rates for population subgroups defined along protected or sensitive lines (gender, race, health status, and deprivation). We do observe some differences in the way credit-scoring models perform for different subgroups, but these manifest under a traditional modelling approach and switching to machine learning neither exacerbates nor eliminates these issues. The paper discusses some of the mechanical and data factors that may contribute to statistical fairness issues in the context of credit scoring.
{"title":"Algorithmic fairness in credit scoring","authors":"Teresa Bono, Karen Croxson, Adam Giles","doi":"10.1093/oxrep/grab020","DOIUrl":"https://doi.org/10.1093/oxrep/grab020","url":null,"abstract":"\u0000 The use of machine learning as an input into decision-making is on the rise, owing to its ability to uncover hidden patterns in large data and improve prediction accuracy. Questions have been raised, however, about the potential distributional impacts of these technologies, with one concern being that they may perpetuate or even amplify human biases from the past. Exploiting detailed credit file data for 800,000 UK borrowers, we simulate a switch from a traditional (logit) credit scoring model to ensemble machine-learning methods. We confirm that machine-learning models are more accurate overall. We also find that they do as well as the simpler traditional model on relevant fairness criteria, where these criteria pertain to overall accuracy and error rates for population subgroups defined along protected or sensitive lines (gender, race, health status, and deprivation). We do observe some differences in the way credit-scoring models perform for different subgroups, but these manifest under a traditional modelling approach and switching to machine learning neither exacerbates nor eliminates these issues. The paper discusses some of the mechanical and data factors that may contribute to statistical fairness issues in the context of credit scoring.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49479265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article reviews the existing literature about management practices in family firms, the most prevalent form of corporate ownership around the world. I summarize the existing evidence that shows family firms are less likely to adopt structured management practices, especially ‘dynastic’ family firms that combine family ownership and control. I discuss what might be the unique features of family firms that drive the lower adoption of management practices, despite the evidence that improving management boosts their productivity and performance.
{"title":"Family firms and management practices","authors":"Margarita Tsoutsoura","doi":"10.1093/oxrep/grab005","DOIUrl":"https://doi.org/10.1093/oxrep/grab005","url":null,"abstract":"\u0000 This article reviews the existing literature about management practices in family firms, the most prevalent form of corporate ownership around the world. I summarize the existing evidence that shows family firms are less likely to adopt structured management practices, especially ‘dynastic’ family firms that combine family ownership and control. I discuss what might be the unique features of family firms that drive the lower adoption of management practices, despite the evidence that improving management boosts their productivity and performance.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47741599","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An enduring idea in economics and management sciences is that successful business strategies exploit complementarities across management practices within a firm. From this complementarity perspective, the success of business strategy requires utilizing a variety of interdependencies across management practices. Navigating large arrays of possible interdependencies implies that strategic decision-making is often conducted under high complexity and uncertainty. This paper provides an introduction to the conceptual foundations of complementarities in business strategy, and its implications for strategic decision-making and managerial learning. Against this backdrop, I outline issues of measurement and data collection for strategy practices, drawing on recent measurement efforts by academic researchers as well as national statistical agencies. The last part of the paper discusses how increased large-scale data collection on firm activity complementarities and strategy practices can inform a variety of policy areas, such as antitrust policy and merger review, industrial and innovation policy, tax policy, and public–private partnerships.
{"title":"The interdependence imperative: business strategy, complementarities, and economic policy","authors":"Mu-Jeung Yang","doi":"10.1093/oxrep/grab010","DOIUrl":"https://doi.org/10.1093/oxrep/grab010","url":null,"abstract":"\u0000 An enduring idea in economics and management sciences is that successful business strategies exploit complementarities across management practices within a firm. From this complementarity perspective, the success of business strategy requires utilizing a variety of interdependencies across management practices. Navigating large arrays of possible interdependencies implies that strategic decision-making is often conducted under high complexity and uncertainty. This paper provides an introduction to the conceptual foundations of complementarities in business strategy, and its implications for strategic decision-making and managerial learning. Against this backdrop, I outline issues of measurement and data collection for strategy practices, drawing on recent measurement efforts by academic researchers as well as national statistical agencies. The last part of the paper discusses how increased large-scale data collection on firm activity complementarities and strategy practices can inform a variety of policy areas, such as antitrust policy and merger review, industrial and innovation policy, tax policy, and public–private partnerships.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":"1 1","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41397814","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces and summarizes this issue of the Oxford Review of Economic Policy, on management practices. We outline key concepts in the empirical study of structured management practices, then summarize each of the eight papers that follows. We conclude by speculating on future directions for research and policy development in this area.
{"title":"Management practices and public policy: an overview","authors":"S. Quinn, Daniela Scur","doi":"10.1093/OXREP/GRAB007","DOIUrl":"https://doi.org/10.1093/OXREP/GRAB007","url":null,"abstract":"\u0000 This paper introduces and summarizes this issue of the Oxford Review of Economic Policy, on management practices. We outline key concepts in the empirical study of structured management practices, then summarize each of the eight papers that follows. We conclude by speculating on future directions for research and policy development in this area.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46700755","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The empirical management literature has found that the education of both managers and the workforce more generally appears to be an important driver of better management practices. This article sets out how such relationships might be conceptualized, and suggests that in a complementarities framework, modern management practices can be thought of as a type of skill-biased technology. It then summarizes the literature that has explored the relationships between human capital and surveyed management practices in manufacturing firms and other sectors, highlighting the handful of papers that have found a positive correlation between management practices and measures of local skills supply. It concludes with a discussion of the policy implications that stem from what we know so far, together with avenues for future research that could shed more light on the causal mechanisms at play.
{"title":"Education and management practices","authors":"A. Sivropoulos-Valero","doi":"10.1093/oxrep/grab006","DOIUrl":"https://doi.org/10.1093/oxrep/grab006","url":null,"abstract":"\u0000 The empirical management literature has found that the education of both managers and the workforce more generally appears to be an important driver of better management practices. This article sets out how such relationships might be conceptualized, and suggests that in a complementarities framework, modern management practices can be thought of as a type of skill-biased technology. It then summarizes the literature that has explored the relationships between human capital and surveyed management practices in manufacturing firms and other sectors, highlighting the handful of papers that have found a positive correlation between management practices and measures of local skills supply. It concludes with a discussion of the policy implications that stem from what we know so far, together with avenues for future research that could shed more light on the causal mechanisms at play.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46488761","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is increasing interest in measuring management in schools. This paper discusses a popular measurement tool: the World Management Survey (WMS) for schools. Drawing on WMS data, secondary sources, and the recent literature on school management, we take stock of the WMS and make recommendations for its use in future research and policy. We conclude that the WMS remains a highly useful tool for its stated purpose—the standardized measurement of (a subset of) management practices within schools—and make two sets of recommendations. First, we encourage those seeking to benchmark management practices in schools to take a systems perspective by extending the WMS approach upwards into the education bureaucracy. Second, when measuring practices within schools, we recommend that researchers consider: how best to assess alignment across practices in the operations domain; the challenge of measuring student learning for monitoring and target-setting; and the context specificity of people management.
{"title":"Management in education systems","authors":"Yue-Yi Hwa, C. Leaver","doi":"10.1093/oxrep/grab004","DOIUrl":"https://doi.org/10.1093/oxrep/grab004","url":null,"abstract":"\u0000 There is increasing interest in measuring management in schools. This paper discusses a popular measurement tool: the World Management Survey (WMS) for schools. Drawing on WMS data, secondary sources, and the recent literature on school management, we take stock of the WMS and make recommendations for its use in future research and policy. We conclude that the WMS remains a highly useful tool for its stated purpose—the standardized measurement of (a subset of) management practices within schools—and make two sets of recommendations. First, we encourage those seeking to benchmark management practices in schools to take a systems perspective by extending the WMS approach upwards into the education bureaucracy. Second, when measuring practices within schools, we recommend that researchers consider: how best to assess alignment across practices in the operations domain; the challenge of measuring student learning for monitoring and target-setting; and the context specificity of people management.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44743853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Aisha J. Ali, J. Fuenzalida, M. Gómez, M. J. Williams
We review the literature on people management and performance in organizations across a range of disciplines, identifying aspects of management where there is clear evidence about what works as well as aspects where the evidence is mixed or does not yet exist. We organize our discussion by four lenses, or levels of analysis, through which people management can be viewed: (i) individual extrinsic, intrinsic, and psychological factors; (ii) organizational people management, operational management, and culture; (iii) team mechanisms, composition and structural features; and (iv) relationships, including networks, leadership, and individuals’ relationships to their job and tasks. Each of these four lenses corresponds not only to a body of literature but also to a set of management tools and approaches to improving public employees’ performance; articulating the connections across these perspectives is an essential frontier for research. We find that existing people management evidence and practice have overemphasized formal management tools and financial motivations at the expense of understanding how to leverage a broader range of motivations, build organizational culture, and use informal and relational management practices. We suggest that foregrounding the role of relationships in linking people and performance—relational public management—may prove a fertile and interdisciplinary frontier for research and practices.
{"title":"Four lenses on people management in the public sector: an evidence review and synthesis","authors":"Aisha J. Ali, J. Fuenzalida, M. Gómez, M. J. Williams","doi":"10.1093/oxrep/grab003","DOIUrl":"https://doi.org/10.1093/oxrep/grab003","url":null,"abstract":"\u0000 We review the literature on people management and performance in organizations across a range of disciplines, identifying aspects of management where there is clear evidence about what works as well as aspects where the evidence is mixed or does not yet exist. We organize our discussion by four lenses, or levels of analysis, through which people management can be viewed: (i) individual extrinsic, intrinsic, and psychological factors; (ii) organizational people management, operational management, and culture; (iii) team mechanisms, composition and structural features; and (iv) relationships, including networks, leadership, and individuals’ relationships to their job and tasks. Each of these four lenses corresponds not only to a body of literature but also to a set of management tools and approaches to improving public employees’ performance; articulating the connections across these perspectives is an essential frontier for research. We find that existing people management evidence and practice have overemphasized formal management tools and financial motivations at the expense of understanding how to leverage a broader range of motivations, build organizational culture, and use informal and relational management practices. We suggest that foregrounding the role of relationships in linking people and performance—relational public management—may prove a fertile and interdisciplinary frontier for research and practices.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":" ","pages":""},"PeriodicalIF":6.8,"publicationDate":"2021-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45834753","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In Europe, it is quite common for public opinions and national politicians to blame economic insecurity and rising inequality on deeper regional integration within the European Union (EU), and especially on the euro. There is, however, no empirical research that clearly identifies the euro as the cause of the recent increase in income inequality. Using the synthetic counterfactual methodology developed by Abadie and Gardeazabal (2003), I estimate what would have happened to inequality in both gross and net income within euro-area countries, had these countries not switched to the single currency. In most countries (especially peripheral countries), without the euro, gross-income inequality would have been lower, while net-income inequality would have been higher. These results imply that, while deeper economic integration might have exacerbated gross income inequality, lower interest rates allowed countries to counteract these disparities with their social welfare programmes.
{"title":"Regional integration and income inequality: a synthetic counterfactual analysis of the European Monetary Union","authors":"F. Bouvet","doi":"10.1093/OXREP/GRAA059","DOIUrl":"https://doi.org/10.1093/OXREP/GRAA059","url":null,"abstract":"\u0000 In Europe, it is quite common for public opinions and national politicians to blame economic insecurity and rising inequality on deeper regional integration within the European Union (EU), and especially on the euro. There is, however, no empirical research that clearly identifies the euro as the cause of the recent increase in income inequality. Using the synthetic counterfactual methodology developed by Abadie and Gardeazabal (2003), I estimate what would have happened to inequality in both gross and net income within euro-area countries, had these countries not switched to the single currency. In most countries (especially peripheral countries), without the euro, gross-income inequality would have been lower, while net-income inequality would have been higher. These results imply that, while deeper economic integration might have exacerbated gross income inequality, lower interest rates allowed countries to counteract these disparities with their social welfare programmes.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":"37 1","pages":"172-200"},"PeriodicalIF":6.8,"publicationDate":"2021-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45877966","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article charts the changing context of regional economic development and the advancement of both policy thinking and analysis on this issue. The shift away from ‘traditional’ regional policies, designed to bring about regional convergence, towards new approaches, designed to exploit the economic development potential of regions, is the focus of the article. Specific attention is paid to the emergence of regional development strategies in the process, where ‘regions’ may be defined functionally rather than administratively. We outline the elements of such strategies—including redefining objectives, new types of interventions, involvement of new actors, and the broadening and integration of regional interventions—which distinguish them from traditional policy and which will determine the degree of success achieved. In conclusion, the paper raises two points of interest, namely the need for more inclusive regional development processes and better implementation of these demanding strategies.
{"title":"The changing nature of regional policy in Europe","authors":"Ties Vanthillo, Joris Beckers, A. Verhetsel","doi":"10.1093/OXREP/GRAA058","DOIUrl":"https://doi.org/10.1093/OXREP/GRAA058","url":null,"abstract":"\u0000 This article charts the changing context of regional economic development and the advancement of both policy thinking and analysis on this issue. The shift away from ‘traditional’ regional policies, designed to bring about regional convergence, towards new approaches, designed to exploit the economic development potential of regions, is the focus of the article. Specific attention is paid to the emergence of regional development strategies in the process, where ‘regions’ may be defined functionally rather than administratively. We outline the elements of such strategies—including redefining objectives, new types of interventions, involvement of new actors, and the broadening and integration of regional interventions—which distinguish them from traditional policy and which will determine the degree of success achieved. In conclusion, the paper raises two points of interest, namely the need for more inclusive regional development processes and better implementation of these demanding strategies.","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":"37 1","pages":"201-220"},"PeriodicalIF":6.8,"publicationDate":"2021-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/OXREP/GRAA058","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43036190","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-05eCollection Date: 2021-01-01DOI: 10.1093/oxrep/graa067
Frank Cörvers, Ken Mayhew
Significant regional inequalities of income and wealth exist in every Western European country and in North America, but their extent varies from country to country. In both Europe and the US, it is generally thought that they tended to narrow from the early 1900s until about 1980, since when they have widened. This widening has become associated with the rise of populism, while the Covid-19 crisis has thrown regional disadvantage into sharp relief. This article discusses measurement issues, traces developments over time, and explores the social and economic consequences of regional disparities. It describes the evolution of regional policy, and in particular the move to more localized approaches in Europe, analysing their strengths and weaknesses.
{"title":"Regional inequalities: causes and cures.","authors":"Frank Cörvers, Ken Mayhew","doi":"10.1093/oxrep/graa067","DOIUrl":"10.1093/oxrep/graa067","url":null,"abstract":"<p><p>Significant regional inequalities of income and wealth exist in every Western European country and in North America, but their extent varies from country to country. In both Europe and the US, it is generally thought that they tended to narrow from the early 1900s until about 1980, since when they have widened. This widening has become associated with the rise of populism, while the Covid-19 crisis has thrown regional disadvantage into sharp relief. This article discusses measurement issues, traces developments over time, and explores the social and economic consequences of regional disparities. It describes the evolution of regional policy, and in particular the move to more localized approaches in Europe, analysing their strengths and weaknesses.</p>","PeriodicalId":48024,"journal":{"name":"Oxford Review of Economic Policy","volume":"37 1","pages":"1-16"},"PeriodicalIF":6.8,"publicationDate":"2021-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8083473/pdf/graa067.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"39055719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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