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

Mohammad Imdadul Haque and Md Riyazuddin Khan
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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

International Journal of Energy Economics and Policy, 2019, vol. 9, issue 2, 251-256

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.

Keywords: HDI; Oil production; Government spending; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: H50 I15 I25 I31 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2019-02-29

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