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Blurry Vision: Institutional Impediments to Reform in Saudi Arabia

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Technical Report

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Naval Postgraduate School Monterey United States

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In April 2016, the Saudi Arabian government announced Vision 2030, a highly ambitious reform program designed to move the country away from its reliance on oil revenues and to liberalize its conservative social dynamics. Despite the monarchys autocratic power, the kingdom has largely failed to employ citizens in the private sector, diversify its industries beyond hydrocarbon-related activity, and privatize the key drivers of its economy since adopting these goals in 1970. The majority of the population is under the age of 30, unemployment is high, and international energy markets are changing, so the countrys leadership needs to make changes that provide opportunity for the people and make the economy more sustainable. This thesis examines why the Kingdom of Saudi Arabia struggles to implement economic and social reform. By analyzing interconnected political, economic, and social causes that manifest in the structure of the state and society, the resource curse, and market inefficiencies, we show that the ultimate barrier to reform is the kingdoms political dynamics. Without improvements to governance and modifications to the countrys patronage policies, economic change will be limited at best. Elites preferences for blocking political reform has hampered achievement of economic goals and will continue to prove problematic if not rescinded.

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