THE SAUDI ARABIAN BUDGETING SYSTEM: AN INSTITUTIONAL ASSESSMENT
Version of Record online: 26 FEB 2014
Copyright © 2014 John Wiley & Sons, Ltd.
Public Administration and Development
Volume 34, Issue 1, pages 63–80, February 2014
How to Cite
Joharji, G. and Willoughby, J. (2014), THE SAUDI ARABIAN BUDGETING SYSTEM: AN INSTITUTIONAL ASSESSMENT. Public Admin. Dev., 34: 63–80. doi: 10.1002/pad.1608
- Issue online: 26 FEB 2014
- Version of Record online: 26 FEB 2014
- Manuscript Accepted: 6 JAN 2012
- Manuscript Revised: 30 DEC 2011
- Manuscript Received: 11 JUL 2011
- budget systems;
- fiscal policy;
- Saudi Arabia
This article describes and evaluates the budgetary institutions in Saudi Arabia. The primary sources of information for this study are publications from the Saudi Ministry of Finance and a survey implemented to investigate the different aspects of budget formulation and execution. We find that the Saudi budget experiences difficulties associated with incremental annual line-item budgeting systems. Although capital expenditures in the education and health sectors are guided by five-year plans developed by the Ministry of Planning, the rest of the budget preparation procedure is mainly driven by requests from government agencies to increase spending (i.e. a bottom-up approach), instead of being based on an early determination of the macroeconomic constraints and the acceptable level of deficit (i.e. a top-down approach). The result is an exacerbation of tragedy of the commons problems associated with information asymmetry and conflict-avoidance strategies. We discuss possible reasons for this finding and offer budgetary reform proposals. Copyright © 2014 John Wiley & Sons, Ltd.