The relative impact of government expenditures on industrial development in the Arabian Gulf

The purpose of this paper is to examine the role of government expenditures in affecting industrial development in the Arabian Gulf. In particular, have government expenditures stimulated increased levels of industrial output or perhaps by diverting resources away from industrial activity, have these expenditures tended to depress the expansion of the regions industrial diversification and development? Has the composition of governmental expenditures between defense and non-defense affected the pattern and pace of the region’s industrial development? Tha main finding of the study is that at best, public sector expenditures have been neutral in affecting the region’s industrial diversification. More likely, they have been a retarding factor. Interestingly enough it is non-defense rather than defense expenditures that have tended to impact negatively on the industrial sector.