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THE RELATIONSHIP BETWEEN FISCAL POLICY AND ECONOMIC DEVELOPMENT IN THE KINGDOM OF SAUDI ARABIA: AN ANALYTICAL STUDY
Keywords:
public policy, fiscal policy, economic developmentDOI:
https://doi.org/10.17654/0972361725075Abstract
This study examines the relationship between fiscal policy and economic development in Saudi Arabia from 1970 to 2024. Despite ongoing efforts to diversify the economy and reduce reliance on oil, fiscal policy has remained largely pro-cyclical and dominated by public spending in the absence of a comprehensive fiscal framework. Using a mixed-methods Concurrent Nested Design, the study analyzes historical budget allocations with descriptive statistics, Pearson correlation, and linear regression to assess links between government spending and the Human Development Index (HDI). Findings show long-term prioritization of defense, education, and public administration, with consistent emphasis on human capital investment. The study recommends adopting a counter-cyclical fiscal framework, shifting education and health spending toward quality and measurable outcomes, and ensuring sustainable financing for diversification initiatives to support long-term economic development.
Received: October 16, 2025
Accepted: November 19, 2025
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