Geography of the Digital Paradox: A Development Economics Perspective on Algeria’s Structural Transformation (1994–2022)

Abstract

In the discourse of Development Economics, the transition to a "Smart Society" is often viewed as a catalyst for bypassing traditional industrial stages. However, the spatial and structural reality in emerging markets like Algeria presents a more complex narrative. This study investigates the impact of the digital economy on economic growth in Algeria from a geographical and developmental perspective (1994–2022). Utilizing a multiple linear regression model via EViews 10, we examine the relationship between GDP per capita and key spatial/structural determinants: internet penetration (NET), physical capital (CAP), and trade openness (TR). The results confirm a Digital Productivity Paradox: while physical investment and trade show positive but statistically insignificant effects, internet penetration exhibits a highly significant negative coefficient (-0.0849, p = 0.0003). From a development economics standpoint, this suggests that Algeria is facing a "Leapfrogging Failure," where digital infrastructure exists but lacks productive integration into the national value chain. From a geographical perspective, the findings imply that the digital dividend is likely hampered by a spatial divide between urban centers and rural peripheries, leading to "consumptive" rather than "industrial" connectivity. The study concludes that to achieve the "Digital Algeria 2030" goals, policy must shift from national infrastructure coverage to localized digital industrialization and the closing of the spatial productivity gap.