Public Investment in Transport: A Test of the Hicks-Kubisch Thesis for Saudi Arabia

Abstract

Because of the falling oil revenues throughout the 80' s, Saudi Arabia, as most of the OPEC countries, was forced to introduce fiscal austerity programs. However, little is known about the criteria followed in setting expenditure priorities, particularly with reference to the transportation and communication sector. The paper deals with issues such as: how the Saudi Arabian authorities revised their allocations to the major budgetary categories following revenue developments during the fiscal year; the topic of supposed systematical unanticipated changes in revenues; the related issue of which categories gained or lost; and finally the possible insights as to the strategy followed by the government in setting budgetary priorities.