Explaining the Relationship between Oil Revenues and Productivity in Iran

Realization of the knowledge-based economy model is a basic requirement for developing countries. In this model, knowledge plays important role in improving productivity. This paper claims that in a world where the economic ties are formed in terms of the knowledge-based economy, a resource-dependent economic model, regardless of productivity, is not a proper solution for the Iranian economy. Due to the necessity of moving from oil-based to knowledge-based economy in Iran, this paper studies the impact of oil revenues on productivity and realization of knowledge-based economy. This research employs a descriptive – analytical method to define and identify characteristics of knowledge-based economy and examines the obstacles resulting from spending oil revenues in creating knowledge-based economy. This paper finds that spending rents from oil revenues, through its reward structure and knowledge direction lead the Iran economy to the unproductive knowledge and consequently low rates of productivity and prevent the creation of productive knowledge, then prevent the realization of the knowledge-based economy in Iran.