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A goal programming approach to resource allocation in Saudi Arabia
Abstract
Economic development by its very nature is a process oriented towards achieving numerous economic, political, and social objectives. In the context of Saudi Arabia, this process is oriented towards more rapid economic growth, diversifying the sources of national income and reducing the country's dependence on oil, raising the standard of living, maintaining economic and social stability, and developing human resources. A realization of the multiple nature of development objectives and a consideration of the Saudi historical experience of continuous shifts in the priorities of these objectives reveal that the evaluation and application of national resources should be conducted on the context of a multi-objective analytical framework. The purpose of this study is to explore the suitability and usefulness of goal programming technique in modeling, analyzing, and solving multi-objective resource allocation problems in Saudi Arabia. The problem set forth by the model is of a comparative static nature. It consists of making an optimal move from the initial conditions in the base year of 1983 to the terminal year of 1984. The objective function is specified in terms of positive and negative deviations from three goals related to labor skills, GDP, and diversification. These deviations are then minimized subject to several constraints operating on the system in the terminal year. The results appear to be exceedingly reasonable. The optimal pattern of domestic production provides a close approximation of the actual sectoral activities in 1984. The solution permits full achievement of the labor skills and GDP goals and incomplete attainment of the specified diversification goal. The results also indicate conflicting relationships among the labor skills and diversification goals, provide quantitative measures of these conflicts, and identify the trade-off choices available to policy makers. Furthermore, sensitivity tests suggest that the pattern of priorities the economy is assumed to pursue exert significant influence upon the way in which resources are allocated, and hence, upon the pattern and rate of growth of domestic production.
Subject Area
Economics
Recommended Citation
Al-azzaz, Abdallah Sulaiman, "A goal programming approach to resource allocation in Saudi Arabia" (1991). ETD collection for University of Nebraska-Lincoln. AAI9219364.
https://digitalcommons.unl.edu/dissertations/AAI9219364