Governance and economic efficiency in the management of oil revenues in Algeria

Abstract

The aim of this study is to investigate relationship between the governance
indicators, and fiscal policy in place and the manner which oil revenues
managed in Algeria. The present study using descriptive and analytical
approach .
Algeria has suffered since its independence from pro-cyclical fiscal policy,
resulting from the fluctuation of revenues, where the decision-makers did
unable to achieve economic diversification in spite of the accumulation of
considerable financial surpluses during periods of booming oil market, and
the disposal of the dependency for the oil sector, which refers to not optimally
exploit the financial surpluses during the boom .
Over time, oil revenues in Algeria have become the core and basis of politics
in general, and the cornerstone of economic policies in particular. Usually
high rents in developing countries accompanied with the bad governance
indicators. The result shows that the problem in Algeria is the non-application
of standards of governance (activating of the control and regulatory role of
government, elimination of corruption, provide a democratic environment that
allows transparency and accountability) in the management of oil revenues,
which led to inefficiency exploitation of these financial surpluses, and the
emergence of some negative phenomena such as: the spread of corruption and
the decline of good governance indicators.