Evaluation of industrial policy: methodological issues and policy lessons

Industrial policy, covers a multitude of policy instruments and approaches. While there has been a recent revival of interest in industrial policy around the world, systematic evidence of efficacy is relatively scarce.

This new OECD report (Evaluation of industrial policy (2014)) brings together the work of an OECD expert group that has considered recent evidence from the evaluation of industrial policy.

The report focuses on three specific policy areas, namely:

• support for R&D;
• capital market interventions (with a focus on risk capital);
• public procurement for innovation.

It also examines three areas where packages of industrial policy measures are generally applied:

• sector approaches including public-private partnerships PPP);
• policies towards clusters and business networks;
• national industrial strategies.

In many areas of industrial policy, evaluation faces particular methodological challenges. These challenges are outlined in the report, which concludes by drawing together the main policy lessons from the available evaluation evidence.

In particular the recomendations to the policy makers are:

• Make an explicit commitment to the evaluation of industrial policy
• Insist on the development of data and evaluation strategies before programmes can begin.
• Choose evaluation techniques appropriate to the programmes concerned.
• Evaluate industrial strategy using mixed methods.
• Insist on full disclosure in evaluation reports.
• Create robust governance mechanisms to ensure evaluation is objective and free of political influence.
• Develop effective mechanisms for policy learning

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photo: (*) Photosolde
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Two articles on corporate governance

 

"Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. Nonprofit governance is a political and organizational process involving multiple functions and engaging multiple stakeholders. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders and stakeholders on their stewardship and tu ensure the mission fullfillment and overall accountability".

Forprofit companies:
The Financial Reporting Council is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment. They promote high standards of corporate governance through the UK Corporate Governance Code.

In 2014 they have published a new version of the UK corporate governance code

Nonprofit companies:
Vic Murray, adjunct Professor in the School of Public Administration at the University of Victoria.  and Yvonne Harrison  assistant Professor in the Department of Public Administration and Policy in Rockefeller College of Public Affairs and Policy, University at Albany, have published in 2014 Guidelines for Improving the Effectiveness of Boards of Directors of Nonprofit Organizations

Two intersting documents to read and try to learn how to improve our corporate boards. 

photo: 1958 | On the screen of a drive-in theater in Utah, Charlton Heston, as Moses in the The Ten Commandments, throws his arms wide before what appears to be a congregation of cars at prayer. Published in the December 22, 1958, issue of LIFE. 

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Hospitals and market share: Is market power good or bad?

David Cutler, Professor of Applied Economics at the Department of Economics and Kennedy School of Government in Harvard University published with Fiona Scott Morton in 2013 at JAMA Hospitals, market share and consolidation. They said in their conclusion:

" A central economic question about the emerging health system is whether consolidation of large hospital institutions is beneficial or harmful. The answer is not always the same because it depends on the environment in which consolidation occurs, who is consolidating, how large each organization is in its different markets,and whether the combined entity improves quality of care.

Having policy makers be smart about how hospitals and other health care institutions are allowed to consolidate is critical to ensuring that the population is receiving the best care possible at reasonable, affordable prices".

Recently it has appeared a report done by FTI consulting that says: "Hospital mergers offer substantial benefits for patients and communities. This study provides a comprehensive review and analysis of hospital merger studies and trends that uncovers a reality rooted in research and quite different than what many people think". FTI consulting report (2014)

Two interesting papers to read this 2015 and analyse the benefits and harms of market power in the health care sector.

Reading it we probably could understand and anticipate what will happen (or happening now!) in Spain in general and in Catalonia and Barcelona in particular in the private health care sector market and the behaviour of the different actors: health care organiazations, insurances, doctor companies, and consumers.

photo: (*) Photosolde
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merry christmas and happy new year 2015

designed by: Soldevila. disseny, comunicació i art
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Data: the most valuable commodity

Data is becoming a "commodity". The important point today is HOW we USE the data NOT the data itself. The data itself is like a barrel of oil: It's basically the same product regardless of the producer.

If we believe in this idea we could understand also that the current definition of "personal data" is evolving. The report published by World Economic Forum in collaboration with The Boston Consulting Group in 2013 Unlocking the value of personal data: from collection to usage (2013) explains how the world and the use of personal data are changing:

"What is considered personal data is increasingly contextual; it changes with personal preferences, new applications, context of uses, and changes in cultural and social norms. Traditionally, organizations have used a variety of techniques to de-identify data and create value for society while protecting an individual’s privacy. Such data was not subject to the same rules as the Personal Identificable Information (PII) as an individual could not be identified from it.

Today technological advances and the ability to associate data across multiple sources is shifting boundaries of what is or is not PII, including potential re-identification of previously anonymized data.

This issue is the subject of significant debate with some arguing that this means that all data is effectively personally identifiable and should be treated as such. Others urge caution, arguing that this would curtail many of the beneficialuses of anonymous data with minimal gains in privacy. A shift in approach to thinking less about the data and more about the usage could offer a way forward.

If the usage impacts an individual directly it would require different levels of governance than data which is used in an aggregated and anonymized manner.

• Related post: data is now touching everyone lifes

photo: (*) Photosolde
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What motivates people to display philanthropic behaviour?

The main drivers of philanthropic donation behaviour are defined by Eight Mechanisms:

1. Awareness of need
2. Solicitation
3. Costs and benefits
4. Altruism
5. Reputation
6. Psychological benefits; impure altruims or warm glow
7. Values
8. Efficacy

I would like to focuse in the concepts of altruism, warm glow and efficacy.

• Altruism: Acts of philanthropy can be inspired by a ‘true’ or ‘pure’ concern for the well-being of recipients or the creation of a public good or service. People simple demand more for the public good.
• Impure altruism or warm glow: Some people get some private benefits (positive reputation, a sense of duty or satisfaction... ) from their gift per se, like a "warm glow". Its a selfish motive but with no bad connotations.
• Efficacy: People are more likely to engage in philanthropic behaviour when they perceive their contribution to be more effective.

These concepts are not contradictories, but probably the mechanisms of donation could differ if your are a small donor, a big philantropist or your are company. Probably you will put emphasis or priorizes these three concepts in a different way.

Acces to related articles (in pdf):

• Testing Mechanisms for Philanthropic Behaviour (2011)
• Eight Mechanisms that Drive Charitable Giving (2011)
• Impure altruism-warm glow (1990)

pd: Discussion cycle in Barcelona organized by Ivàlua and Obra social "la Caixa" New Forms of Philanthropy and Social Transformation

photo: (*) Photosolde
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from old managers to the young ones: emerging-markets growth, disruptive technology, and aging populations

Managers aim to improve their performance every day, but in many cases, doing a little better is not enough. Change is hard and risky. Many managers wait until their backs are against the wall before they start rethinking their bussiness models. Social scientists and behavioral economists find that we "human beings" are biased toward the status quo and resist changing our assumptions and approaches even in the face of the evidence. Is this true for the new Millenial-Y generation or it will be different?

To celebrate McKinsey Quarterly’s 50th anniversary Mckinsey has published this article about Management intuition for the next 50 years

The collision of technological disruption, rapid emerging-markets growth, and widespread aging are the three causes that will put the new managers at the edge of a cliff:

• Dynamism in emerging markets: Do you know where Taiyuan is?
• Technology and connectivity: Do you know the Moore's law? 
• Aging populations: Fertility rate projections 

Related post: Where are we?

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