Future of Rentierism in Public Finance of Developing Countries: a comparative snapshot of Saudi Arabia and Nigeria

Lukman Raimi, Abdussalam Aljadani

Abstract


ABSTRACT

 

Oil dependent developing countries in Africa and Middle-East are having hard times with their public finance, and the future looks very bleak in the face of dwindling oil revenue. Leveraging the rentier state theory (RST), this paper examines the future of Rentierism in Public Finance of Saudi Arabia and Nigeria as two similar developing countries. The negative effects of Rentierism have been exacerbated by the consistent drop in oil prices at the international market with ripple reactions on the budgets of both countries. The paper adopts a critical discourse analysis, while sourcing the required data from scholarly articles, World Banks reports and policy documents on Saudi Arabia and Nigeria. The generated non-numerical data were subjected to content analysis from which insightful findings were drawn. It was found that Saudi Arabia and Nigeria possess huge deposits of oil resources, which could be developed as springboards for accelerating both countries’ quest for economic diversification. The implication of this paper is that, it calls for a sustainable post-rentier economic diversification process in Saudi Arabia and Nigeria through industrial, services, tax and tourism development. The findings from this paper need to be strengthened with empirical investigation. The paper concludes with far-reaching recommendations.

 

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Keywords:

Developing Countries, Nigeria, Rentierism, Public Finance, Saudi Arabia

 


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