HMMs are generative — they must model the observation distribution with conditionally independent outputs and cannot use overlapping features; more seriously, the locally normalized transitions of HMM/MEMM cause label bias: probability mass is normalized at each state, gets “sucked” toward states with fewer outgoing transitions, and favors low-branching paths. CRFs eliminate label bias through global normalization by
Z(x), allow rich overlapping features over the observation context, and their convex conditional objective guarantees a global optimum; the cost is iterative training (e.g. L-BFGS / gradient ascent), computing
Z(x) during inference, and slower training than HMMs.