Abstract
Abstract : Throughout the 1980s, Saudi Arabia experienced a period of relative fiscal austerity. Falling oil revenues forced a number of significant budgetary cutbacks. By early 1989, however, the situation had stabilized to the point where the Saudi Government announced that its 1989 budget would be equal to that of 1987--140 million Saudi riyals. To many observers, this signalled a welcome end to the deflationary effects of successive reductions in Government budgetary expenditure over the previous few years. In practice, it allowed Ministries to prepare sufficient projects for implementation, in the event that revenue constraints did not force cutbacks during the year. While most OPEC Countries were forced to introduce similar austerity programmes, little is known about how their Governments set priorities for their shrinking reviews between major expenditure categories. The purpose of this paper is to address this issue. In particular, we are interested in determining the manner in which, in light of revenue developments during the fiscal year, the Saudi Government revised its allocation to the major budgetary categories. Did expenditure on certain categories vary systematically with unanticipated changes in revenue? If so, which sectors gained? Lost? Do these patterns provide insights as to the manner in which the Government established budgetary priorities during this period?
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