Book Chapter
A Growth Collapse with High Rent Point Resources

This chapter examines the growth collapses in Saudi Arabia in the mid-1980s. The growth collapses occurred because resource rents encouraged the relaxation of market discipline that compounded distortions within the economy that were politically difficult to correct. Saudi Arabia’s paternalistic government played Santa Claus with the rents, such that even large investments in education left most nationals ill-equipped to cope without state support.