Working papers published by the United Nations University - Maastricht Economic and social Research and training centre on Innovation and Technology http://www.merit.unu.edu/publications/wp.php UNU-MERIT 2012 by Y. Getachew - Contrary to a popular belief, the most popular Ak growth models display transitional dynamics once the representative agent and complete markets as− sumptions are overturned. The class of models is identi.ed with diminishing− returns at individual but constant−returns at aggregate due to externality e¤ects. Under incomplete markets, the former implies that dynasties with a lower levels of initial capital grow faster. This is picked up by the aggregate economy that passes through a long transitional period before it converges to its balanced growth path. During the transition period, aggregate con− sumption and output grow at the same rate but higher than that of capital. Key words: Transitional dynamics, Ak model, inequality dynamics, heterogeneous households, incomplete capital market JEL Classi.cation: D3, E, O4 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-011 by M. Rehm, W. Gijselaers & M. Segers - Organizational learning has been identified as a pivotal aspect in contributing to the competitive advantage of organizations (e.g. Argote & Ingram, 2000). However, despite ambiguous results on their effectiveness, traditional programs continue to dominate organizational learning initiatives. In this context, Communities of Learning (CoL) are an innovative methodological tool to stimulate knowledge creation and diffusion among members of an organization’s workforce. Previous research has shown that such (online) collaborative learning processes are significantly influenced by the hierarchical positions of individual participants within these communities (e.g. Romme, 1996). However, little is known about how exactly participants’ hierarchical positions influence individual levels of activity and performance levels within CoLs. The present study provides empirical evidence on 27 CoLs of a global training program, analyzing user statistics from asynchronous discussion forums for 235 staff members. The results of our study not only indicate that participants’ hierarchical position has a significant impact on their general level of activity, as well as their final grade. We are also able to reveal a group of “Stars” that lead their CoLs irrespective of their hierarchal position. Similarly, our findings suggest a certain duality among participants holding the lowest hierarchical positions. While the majority exhibits a “follower” mentality, a smaller subgroup appears to take on roles and behaviours usually assigned to team leaders. By considering these insights, managers of training programs can better anticipate participants’ behaviour and device collaborative learning activities that foster a vibrant learning environment, contributing to higher levels of cognitive discourse and social interaction among participants. Keywords: community of learning; online learning; organizational learning; hierarchy; diversity JEL classification codes: D83, I21, I23 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-010 by A. Konté & M. Ndong - This paper investigates the informal information and communication technology (ICT) sector in Senegal with a view to developing indicators that could be used to improve the understanding of the innovation process. Three approaches are used to gather the information needed for the analysis: a review of literature; a questionnaire to collect data; and, a life story to provide context to the research. The analysis provides examples of innovation in the informal ICT sector and examines the relationship of social factors to these examples. As the informal sector dominates the Senegalese economy, the paper contributes to the understanding of innovation driven economic growth in that sector, and to the factors linked to transition of economic activity from one sector to another. JEL Code: O31, O33 Key words: Informal economy, innovation indicators, information and communication technologies, ICT, social http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-009 by F. Vandeninden - The aim of this paper is to evaluate the impact in terms of poverty and cost of the introduction of social (or non−contributory) pensions in Europe. We use data from the household survey EU−SILC and focus on 17 countries. We simulate − in a static framework − the introduction of two social pension schemes: universal and means tested social pensions. We see that the old−age poverty would substantially decrease (average poverty rate goes from 19.7 to 2.5 per cent with the universal scheme) but not totally, even though the level of the universal pension is set up to the poverty line. The impact on poverty with the means tested social pension is quite similar (though always smaller) than the one with the universal pension, since most elderly have few other income sources than pensions. On the opposite, it costs less. In fact, the means test reduces substantially the number of entitled elderly while the universal pension leads to a 'leakage' to non−poor elderly. Key words: Old age poverty, pension systems, social pensions. JEL Codes: D310, D190, H55, I380 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-008 by F. Vandeninden - The term 'transaction cost' has been widely mentioned in the recent literature on aid effectiveness. In fact, the shift into the aid delivery system (see e.g. the Paris Declaration on aid effectiveness) has been justified among others by the high transaction costs generated by the previous aid modalities. In this paper, we first want to understand what the notion of transaction costs means in the context of aid delivery and give a typology of the possible costs. We also develop an analytical framework to evaluate them. This framework appears to be a relevant tool to compare the effectiveness of aid modalities. We finally apply this analytical framework in Mali: we look at the evolution of the foreign aid transaction costs in two sectors (health and education) with the introduction of sector−wide programmes. Key words: aid modalities, aid effectiveness, transaction costs JEL Codes: O20, O22, D23 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-007 by D. Sologon & C. O'Donoghue - Using a fully harmonized panel dataset across 14 European countries between the early− 1990s and 2001, the European Community Household Panel, we fill a gap in the literature with a cross−national comparative study which explores the trends in persistent inequality and transitory inequality across countries belonging to a common economic area, but with different systems and with different rates of adaptation to the economic reality of the 1990s. The covariance structure of earnings is estimated using minimum distance methods. We find a substantial degree of convergence in the overall inequality among the Mediterranean, the Continental and the Anglo−Saxon countries, which reflects a convergence in both permanent and transitory inequality. Among the Nordic/Flexicurity countries we find a strong divergence in the overall inequality, driven by a divergence in both permanent and transitory inequality. Pooling most countries in Europe, we find evidence of a strong convergence in earnings instability. The Nordic/Flexicurity countries have a lower overall inequality, a lower persistent inequality and a higher earnings mobility. These cross−national differences in persistent inequality and earnings instability across Europe can be partly explained by the labour market policies and institutions linked with the wage−setting mechanism. The stricter the regulation in the labour and product market, the higher the persistent inequality. The higher the unionization, the degree of corporatism, and the tax wedge the lower persistent inequality. Corporatist systems are associated with a lower earnings instability than decentralized ones. Keywords: earnings dynamics; permanent inequality; transitory inequality JEL classification codes: C23; D31; J31 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-006 by E. de Neubourg & C. de Neubourg - Malnutrition is accepted to have a negative impact on the school performance of children and adolescents. Malnutrition also has a negative impact on cognitive development and a potentially lasting effect on (some) cognitive functions. This paper focuses on the effects of malnutrition and Post−Traumatic Stress Disorder (PTSD) on short−term−working−memory on children. These effects are important since defective working memory capacities limit the learning ability of young children and thus the success of investment in human capital. The study is based on an empirical study among 80 children (boys and girls) aged between 9 and 13 years old in Banda Aceh, Indonesia, conducted in 2010 in cooperation with UNICEF. The study involved testing the children on a number of working memory tests (Digit Span, Coding and Bourbon−Vos) and the Raven SPM intelligence test. Malnutrition was measured as stunting. The population of children living in Banda Aceh had been exposed to severe stress during the tsunami of December 2004 and its aftermath, and during the long−lasting violent conflict in the region. The study measured the degree of Post−Traumatic Stress Disorder (PTSD) using the Child PTSD Symptoms Scale (CPSS). PTSD is proved to have similar effects on brain development as malnutrition and thus the effects of malnutrition on the working memory of children have to be controlled for the potential effects of PTSD. According to the results of the study, malnutrition is associated with a decrease in performance on the working memory tasks. On the contrary, intelligence measured by Raven's SPM was not associated with the decrease in performance on the working memory tasks, while it was found that a high score on the CPSS was indeed associated with a decrease in the performance on the three working memory tests. The study concludes with a discussion of the policy relevance of the results and sets out an agenda for further research. Key words: PTSD, working memory, malnutrition, tsunami JEL: I14, I21, I24 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-005 by C. Huang - We estimate the value of Chinese invention and utility model patents that were applied for during two periods, 1987−1989 and 1986−1998. We find that patents applied for by foreign entities invariably have higher value than do those applied for by domestic entities, and the gap is significant. The total value of invention and utility model patents in the 1987 cohort together represent about 40 per cent of China's 1987 governmental R&D budget. Keywords: Value; Patent; China; Invention Patent; Utility Model Patent; Patent Renewal JEL code: O32; O34 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-004 by J. Li & C. O'Donoghue - Alignment is a widely adopted technique in the field of microsimulation for social and economic policy research. However, limited research has been devoted to the understanding of their simulation properties. This paper discusses and evaluates six common alignment algorithms used in the dynamic microsimulation through a set of theoretical and statistical criteria proposed in the earlier literature (e.g. Morrison 2006; O'Donoghue 2010). This paper presents and compares the alignment processes, probability transformations, and the statistical properties of alignment outputs in transparent and controlled setups with both synthetic and real life dataset (LII). The result suggests that there is no single best method for all simulation scenarios. Instead, the choice of alignment method might need to be adapted to the assumptions and requirements in a specific project. Key words: alignment, microsimulation, algorithm evaluation JEL Classification: C1 C5 http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-003 by J. Li & C. O'Donoghue - More than 10 years ago O'Donoghue (2001) surveyed the dynamic microsimulation models that had been developed up to that point. However the 2000's have seen many of the barriers that existed for model development up until that point overcome. This paper surveys the development and practices in dynamic microsimulation over the past decade, and discusses the methodological challenges today. The paper provides an overview of the methodological choices made in more than 60 known dynamic microsimulation models and examines the advantages and disadvantages of different practices. In addition, this paper reviews the main progress made in the field and explores how future microsimulation models could evolve. JEL Classification: C1 C5 Key Words: Dynamic Microsimulation, Survey http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-002 by L. Soete - "Innovation is good for you" appears actually the common feature of most science, technology and innovation studies over the last decades. This appears, however surprising given the fact that innovation failure rather than innovation success appears a much more common feature. Hence the simple, but straightforward question which will be central in this Tans lecture: could it be that innovation is not always good for you? A frequently heard argument is that at a societal level, innovation is renewing society’s dynamics and hence leading to higher levels of economic development and welfare. A process of creative destruction destroying maybe a few incumbents to the benefit though of many newcomers. However, sometimes the exact opposite pattern: a process of destructive innovation, benefiting a few at the expense of many, will occur. In this period of "crises" examples abound of such destructive creation processes. In this Tanslecture some typical examples will be highlighted: our unsustainable fossil−fuel based economic growth at the global level; European monetary integration at the European level; financial innovation at the sectoral level. The Tans Lecture is organized every year to honour dr. J. Tans (1912−1993), the founding father of Maastricht University. JEL Codes: O17, O31, O33, O43, F55, G01 Keywords: Innovation, Creative Destruction, Destructive Creation, Economic Growth, International Relations, Financial Crisis http://www.merit.unu.edu/publications/wp.php?year_id=2012#wp2012-001