ECONOMIC DEVELOPMENT AND REVENUE INSTABILITY: THE SAUDI EXPERIENCE

This paper sheds some light on the history of planning in Saudi Arabia.\nEstimates of economic growth of the major variables for the economy were\npresented to show to what extent planning, accompanied by massive\nexpenditures, played a role in accomplishing the plans'objectives. The rates\nof growth during the period 1970-82 point out that massive oil revenue have\ncontributed toward the achievement of the ambitious targets of the first two\nplans. However the declining of oil revenue after 1983 reversed the situation,\nwhere most of the variables have shown negative growth rates. This affected\nthe whole growth rates of the entire period of the twenty years of planning.\nThe last section of the paper presents a model for the effects of revenue\ninstability on development. The results of the test provide additional support\nto the view that revenue instability has an impact on the process of\ndevelopment and economic growth path.