ABSTRACT
This chapter examines how the Saudi government set priorities between major expenditure categories given its fluctuating revenues. It aims to determine the manner in which the Saudi government revised, in light of revenue developments during the fiscal year, its allocation to the major budgetary categories. Throughout the 1980s, Saudi Arabia experienced a period of relative fiscal austerity. The general characterization of the manner in which a government deals with austerity seems to hold up fairly well for the Saudi Arabian case. The evolving budgetary patterns are suggestive of the manner in which the Saudi Government sets priorities for its expenditures. Human resource development and health and social development were the only budgetary categories to have their budgetary shares increase with expanded unanticipated deficits. The deficit-related expansion in human capital seems to have come in part at the expense of longer term investments in economic capacity.
