The Alignment of Financing Instruments with Innovation Modes in Post-War Economic Reconstruction: Designing a Policy Framework Grounded in Data

Document Type : Research paper

Authors

1 Assistant Professor of Science and Technology Policy, National Research Institute for Science Policy (NRISP), Tehran, Iran

2 Masters degree in Science and Technology Policy from Imam Hussein University

10.22034/rahyaft.2026.12422.1715

Abstract

Reconstructing Iran's economy after the Twelve-Day War (June 2025) and the Ramadan War (February–April 2026), under sanctions, simultaneously requires repairing infrastructure, rebuilding industrial value chains, and restoring the capabilities of firms. However, the conventional approach treats financing as a homogeneous resource and overlooks the fact that different reconstruction activities rely on different modes of learning and innovation. This study aims to identify the factors that shape the alignment between financing instruments and reconstruction activities and to explain how these factors are related. The research used systematic grounded theory, based on interviews with policymakers, financial institutions, and executive managers. The findings show that two factors, namely the target level of financing (infrastructure and shared capabilities vs. the firm level) and the dominant innovation mode (science-based vs. experience-based), affect the choice of instrument through the financial characteristics of the activity, such as uncertainty, time horizon, and the ability to provide collateral; the distinction between first-time production and repetition also changes the financial needs of an activity over time. The core phenomenon of the paradigm model is the alignment of the financing instrument with the nature of the reconstruction activity, and its main output is a matrix that distinguishes four combinations of target level and dominant innovation mode and proposes a suitable instrument for each cell. Sanctions, as an intervening condition, limit the range of available instruments and place the financing burden on domestic resources. According to the participants, a mismatch between the instrument and the nature of the activity can lead to a waste of resources; therefore, the focus of reconstruction financing policy should shift from asking "which instrument is better?" to "which instrument is aligned with which activity?"

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