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Role of Oil Production and Government Expenditure in Improving Human Development Index: Evidence from Saudi Arabia

Author

Listed:
  • Mohammad Imdadul Haque

    (CBAK, Prince Sattam Bin Abdulaziz University, Kingdom of Saudi Arabia,)

  • Md Riyazuddin Khan

    (Bhim Rao Ambedkar College, University of Delhi, New Delhi, India)

Abstract

The economic development of Saudi Arabia depends largely upon the receipts from the exports of crude oil being spent as government expenditure on growth needs. Saudi Arabia is included in the very high human development category of United National Development Programme. Using time series data from 1990 to 2016, the study finds that both government spending and oil exports are significant drivers of human development index (HDI) in Saudi Arabia. The study estimates that a 100 (million barrels) increase in oil production will increase the HDI with 4% point. Similarly, a 1% increase in total government expenditure increases 10% point in HDI. The study also reports that expenditure on education contributes the most to HDI. The study also finds an inverse relationship between health expenditure and economic growth. This finding resulted in a recommendation of streamlining the health sector. Finally, the study predicts that HDI index will be 0.94 by 2030.

Suggested Citation

  • Mohammad Imdadul Haque & Md Riyazuddin Khan, 2019. "Role of Oil Production and Government Expenditure in Improving Human Development Index: Evidence from Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 251-256.
    • Handle: RePEc:eco:journ2:2019-02-29
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    References listed on IDEAS

    as
    1. Moayad H. Al Rasasi* & John H. Qualls & Bander K. Algamdi, 2019. "Oil Revenues and Economic Growth in Saudi Arabia," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 5(3), pages 49-55, 03-2019.
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    Cited by:

    1. Al-Hanawi, Mohammed Khaled, 2021. "Decomposition of inequalities in out-of-pocket health expenditure burden in Saudi Arabia," Social Science & Medicine, Elsevier, vol. 286(C).
    2. Abdulaziz A. Alotaibi, 2019. "Budget Policies During and After the Oil Crisis of 2014: Comparative Analysis of Saudi Arabia, UAE, and Kuwait," International Business Research, Canadian Center of Science and Education, vol. 12(6), pages 23-28, June.
    3. Masduki, Uki & Rindayati, Wiwiek & Mulatsih, Sri, 2022. "How can quality regional spending reduce poverty and improve human development index?," Journal of Asian Economics, Elsevier, vol. 82(C).
    4. Zaijun Li & Xiang Zheng & Suleman Sarwar, 2022. "Spatial Measurements and Influencing Factors of Comprehensive Human Development in China," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    5. Houcine Benlaria & Naeimah Fahad S. Almawishir, 2024. "The Relationship between Electricity Consumption, Price of Oils, and Gross Domestic Product in the Gulf Cooperation Council Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 66-75, January.
    6. Abdul Rahman, 2020. "Long run Association of Stock Prices and Crude Oil Prices: Evidence from Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 124-131.
    7. Megbowon Ebenezer & Aderoju Samuel & Gbenga Peter Sanusi, 2021. "Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures," SN Business & Economics, Springer, vol. 1(9), pages 1-19, September.
    8. Mohammad Imdadul Haque, 2021. "Oil price shocks and energy consumption in GCC countries: a system-GMM approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(6), pages 9336-9351, June.
    9. Ifeoluwa Adeola Ologunde & Forget Mingiri Kapingura & Kin Sibanda, 2020. "Sustainable Development and Crude Oil Revenue: A Case of Selected Crude Oil-Producing African Countries," IJERPH, MDPI, vol. 17(18), pages 1-30, September.
    10. Mohamed Noureldin Sayed & Ghada H. Ashour & Nesrin A. Abbas, 2021. "The Impact of the Volatility in Oil Prices on Saudi Arabia s and Algeria s Military Expenditure: A Comparative Study," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 180-190.
    11. Mohammad Imdadul Haque, 2019. "Growth Accounting for Saudi Arabia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(6), pages 691-701, June.
    12. Anis Ali, 2021. "Volatility of Oil Prices and Public Spending in Saudi Arabia: Sensitivity and Trend Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 165-172.
    13. Nashwa Mostafa Ali Mohamed & Kamilia Abd-Elhaleem Ahmed Frega & Jawaher Binsuwadan, 2024. "Can the Digital Economy Outperform the Oil Economy in Terms of Achieving Human Development?," Sustainability, MDPI, vol. 16(12), pages 1-20, June.

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    More about this item

    Keywords

    HDI; Oil production; Government spending; Saudi Arabia;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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