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The Researcher's View : Research news

The researcher's view

In this section, we review the latest peer-reviewed articles and theses in the field of government and public policy-making and look ahead to forthcoming events.

Article reviews

Budget and performance

Blockchain and Financial Intermediation

Marianne Verdier
Professor, University Paris 2 Panthéon-Assas, and Researcher, Paris Center for Law and Economics, France


Blockchain first appeared in the late 2000s as a way to carry out and record transactions in digital format without having recourse to a trusted third party. Although the technology has applications in fields as diverse as private data storage and land registry archives, its impact has been felt most keenly in finance, where it has prompted a rethink of the role played by banks and other traditional financial intermediaries.

The author begins with an overview of the applications of blockchain technology in money transfers, property ownership records, cryptocurrency fundraising and other financial transactions. The article then looks at the processes by which trust is established in a decentralised blockchain-type system and compares them with similar processes in systems involving traditional intermediaries, before demonstrating the technology’s potential to reduce the costs of financial intermediation. The author concludes with a look at how the risks associated with cryptocurrencies and cryptocurrency-denominated fundraising can pose regulatory issues.

The author argues that while blockchain will not eliminate trusted third-party intermediaries altogether, it is changing their role in financial transactions. She outlines how the technology could benefit the financial system on a number of fronts, including by “eroding intermediaries’ monopoly over information, introducing greater transparency into financial audits, and paving the way for innovative new services and funding models”. The article stresses, however, that blockchain technology can only benefit society as a whole if the associated risks are limited through proper regulation.

This article was published in Revue d’économie financière, 2018/1 (No. 129), pp. 67-87, and is available online at:…      


Cyberattack: is risk management still possible? Analysis and lessons from the Sony Pictures case

Jean-Marc Lehu
Assistant Professor of Management Science, Panthéon-Sorbonne University, Paris, France

In a world dominated by the internet and digital technologies, cyberattacks pose a real and present danger to businesses and organisations of all shapes and sizes. In this article, the author defines a cyberattack as a “modern act of piracy in which the perpetrator accesses a network in order to steal and/or destroy information”, but argues that the underlying motivations can differ from one attack to the next. By analysing the cyberattack on Sony Pictures, the author draws insights into the sheer scale of the threat that such attacks pose to organisations, and into their potential consequences.

This article examines the 2014 cyberattack on entertainment company Sony Pictures. The attack began in September 2014 and lasted until 24 November 2014, when hackers rendered 3,262 of the studio’s 6,797 computers, and 837 of its 1,555 servers, unusable in less than an hour. The author examines the information stolen during the attack – some 306,681 internal documents and 173,132 emails, subsequently published on the WikiLeaks website and elsewhere – to reconstruct an accurate timeline of the events. He then compares this timeline, based on internal correspondence, with Sony Pictures’ public statements and information revealed by the press.

Aside from Sony Pictures’ failure to learn the lessons of previous attacks, the author finds that IT security was woefully under-resourced and under-staffed, with a team of just 11 people responsible for preventing cyberattacks at an organisation employing over 6,800 people. He also reveals that, by failing to constantly update its models, the company was unable to adequately test its cyberdefences and identify and protect against attacks. The author makes two key recommendations. First, on the issue of threat preparedness, organisations should “implement quasi-real-time threat detection systems”. And second, for improved crisis management, they should set up a stand-by crisis management unit, draft an emergency response plan, and train employees on an ongoing basis.

This article was published in La Revue des Sciences de Gestion, 2018/3-4 (No. 291-292), pp. 41-50, and is available online at:…   


Government-Citizen Relationship

Technological capacity in the public sector: the case of Estonia

Veiko Lember
Research Fellow, Public Governance Institute, KU Leuven, Belgium

Rainer Kattel
Professor, University College London, UK

Piret Tõnurist
Research Fellow, Tallinn University of Technology, Estonia, and Economist and Policy Analyst, OECD


Technology is a critical factor in the lives of organisations. In this article, the authors investigate a question that, in their view, too few researchers have addressed: “how technological change in the public sector is influenced by complex feedback and selection mechanisms”. Using a new concept, “technological capacity”, they examine first how technology influences administrative capacity in the public sector and second why some organisations have chosen to adopt new technologies while others have not.

The authors use Estonia – internationally associated with a strong e-state profile – as a test case for their conceptual framework. Drawing on evidence from interviews and the literature, they analyse and review trends in nine different areas of Estonia’s public sector: public transport, tax collection, internal security, e-residence, employment, postal services, social security, social services and emergency medical services.

The authors conclude that technology is an intrinsic factor in how administrative capacity evolves, although they observe key differences in the speed and direction of how technology’s impacts unfold in different organisations and services. Some organisations master developing dynamic technological capacities and experience rapid and transformative changes, while others do not and accordingly go through incremental changes. They demonstrate how dynamic and static change in technological capacities is influenced by four different public sector feedback and selection mechanisms: citizen/user feedback, policy networks when a strong supportive coalition emerges, hierarchical feedback, and whether or not organisations possess the authority to act autonomously and/or selectively.

This article was published in International Review of Administrative Sciences, 2018/2 (Vol. 84), pp. 221-239, and is available online at:


Public sector employment

The impact of the digitalisation of organisations on the relationship to work: between alienation and emancipation

Martine Brasseur, professor of Management Science, Université Paris Descartes, France

Fatine Biaz, PhD student in management science, Université Paris Descartes, France

Since the 2000s, the massive introduction of technologies has profoundly transformed management practices and professional relations within organisations. While some observers blame technology for job losses and rising unemployment, others point to its power to spur new business opportunities and economic growth. In this article, the authors examine the impact of technology not on employment, but on people’s relationship with work.

In this article, people’s relationship with work is explored in three dimensions: the “instrumental” dimension (referring to “work as a source of income”), the “social” dimension (sociability and interpersonal relationships at work, among other things), and the “symbolic” dimension (the “positive or negative symbolism that people associate with work”). The authors review relevant scientific literature to examine how this relationship is changing as organisations embrace more and more digital technologies. After first examining the broad question of the digital organisation, they look at how technology affects people’s relationship with work before drilling down into its impact on a specific population group: executives.

The emergence of start-ups with businesses built around online platforms has pushed digital technologies into the mainstream. In response, traditional companies have been left with no option but to embrace new forms of organisation. The authors argue that digital disruption has shifted the balance between three dimensions of people’s relationship with work: instrumental, symbolic and social. They argue that the instrumental dimension now carries less weight, in relative terms, than the symbolic and social dimensions, which have to do with how people assert their identity, contribute to society, or achieve personal fulfilment through work. The authors stress, however, that digital disruption has had some unexpected and adverse consequences. To support their argument, they point to the erosion of trust between executives and their employers between the 1960s and the 1980s, as organisations adopted – and developed an addiction to – new technologies, prompting fundamental changes in management and employment practices and placing increasing mental strain on executives. The authors also highlight the often contradictory demands that companies place on senior employees, such as expecting them to be creative while adhering to corporate culture. They conclude that technological innovation is both a factor of emancipation and a potential source of alienation.

This article was published in Question(s) de management, 2018/2 (No. 21), pp. 143-155, and is available online at:…


Coworking spaces: the role of proximities for collaboration dynamics

Anne-Laure Le Nadant, Professor of Management Science, Université de Rennes, France

Clément Marinos, Assistant Professor of Economics, Université Bretagne Sud and Western Laboratory of Economics and Management (LEGO), France

Gerhard Krauss, Assistant Professor of Sociology, Université de Rennes 2 and Spaces and Societies Research Laboratory (ESO-Rennes), France


Coworking spaces have grown in number and popularity in recent years, giving rise to collaborative dynamics among communities of independent professionals sharing knowledge and resources. The authors draw on the findings of cluster-based research to show that spatial proximity is not enough to generate collaborations between coworkers. They look at the ambivalent role that different forms of proximity (spatial, cognitive, organisations, social and institutional) play in shaping collaborative dynamics and innovation.

The authors carried out interviews at seven coworking spaces in small and medium-sized cities in France and Germany, asking members, facilitators and founders questions on a broad range of issues: from their motivations, backgrounds and roles, to what life at their coworking space is like, how it functions, and how members network and collaborate. They also analysed secondary sources including websites, newsletters and press articles.

The authors demonstrate that spatial (or geographical) proximity is not enough to generate collaborations, and that other forms of proximity are required. They find that cognitive proximity (which they define as “peer learning between people who share the same knowledge base”) and organisational proximity (organisational arrangements that ease coordination and reduce transactions costs in knowledge-sharing) are critically important, and that “opportunity proximity favours collaboration and innovation”. The authors conclude that their findings should encourage coworking space founders and managers to “take stock of the pivotal role that facilitators play in sparking collaboration”.

This article was published in Revue française de gestion, 2018/3 (No. 272), pp. 121-137, and is available online at:…


IN FOCUS : Social Credit in China

Here, we review two articles about China’s emerging social credit system, an initiative that is stirring controversy worldwide..

The Global Age of the Algorithm: Social Credit and the Financialisation of Governance in China

Nicholas Loubere
Associate Senior Lecturer, Centre for East and South-East Asian Studies, Lund University, Sweden

Stefan Brehm
Researcher, Centre for East and South-East Asian Studies, Lund University, Sweden

This article looks at the Chinese government’s ongoing attempts to create a social credit system whose stated aim is to “provide the trustworthy with benefits and discipline the untrustworthy”. The authors argue that Chinese social credit should not be exoticised or viewed in isolation. Rather, it must be understood as merely one manifestation of the global age of the algorithm.

Under the proposed system, the Chinese government will assign honesty and trustworthiness ratings to individuals, organisations and businesses using big data generated from three main sources: commercial information, social media profiles, and surveillance and legal compliance records. The authors describe it as a “technocratic fix” that uses algorithms to mould good citizens. What makes the social credit system different is that citizens’ value is reduced to a political calculation arrived at by combining financial and social information. In other words, the system represents the financialisation of human worth.

The authors show that China’s emerging social credit system is still far from unified and standardised. In principle, the system uses social, economic and commercial data to assign a business or individual an overall score. In practice, however, over 30 local governments are piloting their own versions of the system, utilising different approaches to arrive at their social credit scores and using the scores to achieve different outcomes. They also demonstrate how social credit is, in fact, merely the latest incarnation of a consumer credit scoring system that emerged in the United States in the early 2010s. The authors argue that only a small elite would be needed to manage governance by algorithm, and call for algorithmic audits to protect against a dramatic concentration of power.

Full citation: “The Global Age of the Algorithm: Social Credit and the Financialisation of Governance in China”, in Dog Days: A Year of Chinese Labour, Civil Society, and Rights, Made in China Yearbook 2018, edited by Ivan Franceschini and Nicholas Loubere, ANU Press, Australian National University, Canberra, Australia. The article is available online at:

Constructing Trustworthy and Safe Communities on a Blockchain-Enabled Social Credits System

Ronghua Xu, PhD student, Dept. of Electrical and Computer Engineering, State University of New York – Binghamton, United States

Xuheng Lin, PhD student, Dept. of Electrical and Computer Engineering, State University of New York – Binghamton, United States

Qi Dong, PhD student, Dept. of Electrical and Computer Engineering, State University of New York – Binghamton, United States

Yu Chen, Associate Professor of Electrical and Computer Engineering. State University of New York – Binghamton, United States

This article examines ongoing Chinese government efforts to establish a social credit system, under which citizens who have transgressed – such as failing to pay their taxes properly or getting a speeding ticket – are subject to penalties that, in turn, forbid them from receiving various services like travelling by plane or renting a car. The authors propose testing a proof of concept for what they call a “Blockchain-Enabled Social credits System” (BLESS), arguing that such a system would help to build more trustworthy and safer communities because it is based on secure, transparent and decentralised – and therefore tamper-proof – information in a trustless network environment.

Currently, only the government, large corporations and authorised agencies are capable of assigning social credit scores. The system as it stands relies on combining fragmented public and private data from disparate sources. The underlying variables and processes are opaque and individuals do not participate in the rating procedure, meaning they cannot oversee those in power. The authors argue that the proposed BLESS scheme has three advantages: it leverages the decentralised architecture of the blockchain network, the entire process is transparent while remaining anonymous, and it prevents unauthorised entities from accessing the credit system. In other words, the model provides tamper-proof transaction data in a trustless network environment.

The authors propose using BLESS as the basis for a general rollout of a social credit system. BLESS has three main components: blockchain-enabled data sharing, smart contract-enabled credit score rating, and a rewarding and punishing strategy. Under this model, citizens would be able to improve their credit scores in two ways: by spending time serving their community, and by standing up for social justice (such as speaking out against corruption, broken promises, or other transgressions). The authors conclude that, at present, the BLESS model faces challenges in public acceptance and mass adoption.

Full citation: “Constructing Trustworthy and Safe Communities on a Blockchain-Enabled Social Credits System”, in arXiv (online open-access repository), Cornell University, United States. The article is available online at:

Thesis reviews


Three essays on housing markets and housing policies

Thesis by Zhejin Zhao, Economic Theory and Analysis Group (GATE) laboratory, and Graduate School of Science, Economics and Management, Université de Lyon, France, in partnership with Université Jean-Monnet, Saint-Étienne, France. Supervised by Florence Goffette-Nagot, Director of Research at the French National Centre for Scientific Research (CNRS). Thesis defence date: 20 September 2018.


This thesis contains three empirical essays on housing markets and housing policies.

In the first essay, the author investigates the effects of rent control on rents using historical panel data in Lyon over a 78-year period. He uses multiple regressions with fixed effects as the main form of analysis. His results show that the causal effect of rent control on rents in Lyon is significantly negative.

In the second essay, the author studies how age influences housing demand based on household level data from China. The two-stage hedonic house price model used in this essay allows him to estimate the pure age effect on housing demand, after housing quality and other households’ characteristics are controlled for. The results demonstrate that the willingness-to-pay for a constant-quality house will decrease slightly or keep constant when a representative household head becomes old, if the household head’s educational attainment is controlled for. In contrast, it will drop rapidly if the household head’s educational attainment is not controlled for. Therefore, this essay concludes that the total housing demand will not decrease with population ageing, because the current middle-aged generation is more educated than the current old generation.

Finally, in the third essay, in the framework of Rosen-Roback model, the author analyses how housing costs affect the ratio of high-skilled to low-skilled workers, explicitly the skill intensity ratio (SIR), across cities in China. To avoid endogeneity issues, he uses both share of unavailable land and historical housing prices as instruments of current housing prices. The results show that average housing prices have significant positive effects on the SIR in 2010 when workers’ mobility is relaxed, but insignificant effects on the SIR in 2000 when workers’ mobility was tightly regulated.

The thesis can be viewed online at:


High-frequency trading: a threat to financial stability?


Thesis by Gianluca Virgilio, University of Hertfordshire. Supervised by Georgios Katechos, Maria Schilstra and Aarti Rughoo, Senior Lecturers, University of Hertfordshire, United Kingdom. Thesis defence date: 1 February 2017.


The purpose of this thesis is to produce an in-depth data analysis and computer-based simulations of the market environment to investigate whether financial stability is affected by the presence of high-frequency investors. The author verifies how high-frequency trading and financial stability interact with each other under non-linear conditions, and uses audit trail and simulation data to determine whether non-illicit behaviours can still lead to potentially destabilising effects. Simulations are provided to test whether high-frequency trading: (a) has an impact on market volatility, (b) leads to market splitting into two tiers, and (c) takes the lion’s share of arbitrage opportunities.

Audit trail data is analysed to verify some hypotheses on the dynamics of the flash crash. The simulation on the impact of high-frequency trading on market volatility confirms that when markets are under stress, high-frequency trading may cause volatility to significantly increase. However, as the number of ultra-fast participants increases, this phenomenon tends to disappear and volatility realigns to its standard values. The market tiering simulation suggests that high-frequency traders have some tendency to deal with each other, and that causes low-frequency traders also to deal with other slow traders, albeit to a lesser extent. High-frequency trading potentially allows a few fast traders to grab all the arbitrage-led profits, so falsifying the efficient market hypothesis. This phenomenon may disappear as more high-frequency traders enter the competition, leading to declining profits. Yet, the whole matter seems a dispute for abnormal gains only between few sub-second traders.

From the data analysis, the impact of high-frequency trading on the flash crash seems significant. Overall, it can be concluded that high-frequency trading shows some controversial aspects impacting on financial stability. The results are to a certain extent confirmed by the audit trail data analysis, although only indirectly, since details allowing high-frequency traders to be matched with their behaviour are confidential and not publicly available. Nevertheless, the findings about HFT-induced volatility, market segmentation and sub-optimal market efficiency, albeit not definitive, suggest that careful monitoring by regulators and policy-makers might be required.

The thesis can be viewed online at:


Modelling the emergence of expertise and its governance in innovative organisations: from communities to proto-epistemic societies of experts

Thesis by Benjamin Cabanes, Graduate School of Economics, Management and Society, MINES ParisTech. Supervised by Benoît Weil, Professor, Centre for Management Science (CGS), MINES ParisTech, France. Thesis defence date: 20 June 2017.


In science-based industries, the pace of innovation is characterised by accelerated renewal of products and the destabilisation of dominant designs. In this context of intensive innovation, industrial organisations have to develop new breakthrough innovation capabilities to organise the emergence of new technological expertise allowing the innovative design of new products and technologies. Paradoxically, expertise and innovation issues can sometimes seem to be in opposition or at least in tension. Expertise seems to preserve the dominant designs, but it also allows the generation of conceptual expansion. Behind this aporia, there are crucial questions about the contemporary management of the emergence of expertise in science-based organisations in a situation of intensive innovation.

From an exploratory approach based on a longitudinal case study at STMicroelectronics, this thesis focuses on governance models for the emergence of expertise in science-based organisations. Based on an empirical analysis carried out by STMicroelectronics, this work shows that the emergence of new expertise is effected by a reorganisation and a profound restructuring of the expertise structures. In other words, new areas of expertise emerge from the reconfiguration of interdependent relationships between existing areas of expertise. Moreover, this research suggests a formal model for the emergence of expertise in science-based organisations.

This model helps to identify new managerial challenges and to highlight organisational models to support these forms by which expertise emerges. Then, new management solutions are tested and analysed at STMicroelectronics. Finally, the thesis analyses scientific experts’ roles and missions in innovation strategies within science-based organisations.

The thesis can be viewed online at:



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