TITLE:
The International Experience in Private Sector Development: Lessons for Kuwait
AUTHORS:
Mohammad Ramadhan, Marwa Al-Musallam
KEYWORDS:
Private Sector Development, Public Sector, Economic Growth, Transitional Economies, Rent Seeking, Kuwait
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.4,
April
24,
2014
ABSTRACT:
The State of Kuwait is a small rich oil-based economy characterized by
dominance of the large public sector in major economic activities. Such
imbalanced structure has limited the role of the private sector in economic
activities and has adversely affected economic growth. Based on
the review of international experience in private sector development, this
paper aimed to substantiate the impact of both private and public sectors
growth on economic performance. Analysis of Kuwait's public expenditures
verified the public sector
dependency on oil revenues and inefficient utilization of resources. The theoretical review revealed
a positive direct relationship between high GDP growth rate and the increased
role of the private sector in the economy. Moreover, the review of recent
transitional economies experiences in constructive economic transformation can
be considered as an evidence of a rapid effective private sector growth. Finally,
the analysis also demonstrated that Kuwait's public sector
expenditures depict a rent seeking behaviour that has negatively impacted the
society welfare.