ERF 27th Annual Conference
Testing the External Shock Narrative of the Conflict on Transition Towards Knowledge Economy in Syria
No.
ERF27_113
Publisher
ERF
Date
May, 2021
Topic
P. Economic Systems
In the existing literature, several narratives explain the failure of low-income countries in catching-up with developed countries, or at least in achieving concrete steps in the way of transitioning towards an economy more dependent on knowledge and innovation. Among these narratives is the theory of external shocks, which suggests that the underdevelopment of low-income countries is due to external shocks of various kinds: economic or political ones. In this study, we examine the literature of the external shocks to explain and analyze the impact of the conflict in Syria on the transition process towards a knowledge-based economy before and during the conflict. This study endeavors to analyze the real causes that hindered and are hindering the Syrian economy from transitioning towards a knowledge-based economy, and thus suggest policies that pave the way for a successful reconstruction process, and at the same step forward towards building Syrian new economy. To achieve these objectives, we apply the Documentary Research Method (DSM) to analyse the existing literature of the external shock theory and studies that investigated the transition process towards a knowledge-based economy in low-income countries. We also apply the Structural Vector Autoregression (SVAR) to measure the impact of the internal and external shocks on some innovation and knowledge creation-related variables. Our results indicate that, in the long run, external shocks do not provide a comprehensive explanation of the failure in building a knowledge-based economy in Syria. On the other hand, internal shocks, whether the shock of liberal policies or the internal conflict, provide better insights. The results also show that the internal shocks in general, and the shock of liberal policies, are largely responsible for Syria's failure to transitioning to a knowledge-based economy, and for the outbreak and development of the conflict. In light of these results, we have proposed a set of economic policies for the reconstruction of Syria based on a non-classical approach that orient the reconstruction process towards building a knowledge-based economy and raising the pace of convergence with other countries in the region whether in terms of digitization or changing the sectoral structure of the economy.
Authors
Ibrahim Alnafrah
Researcher and Lecturer, Faculty of Economics, Damascus...
Authors
Sulaiman Mouselli
Dean of the Business Administration Faculty and...