Proposal of economic diversification in algeria - way to fiscal policy effectiveness increasing

Abstract

The hydrocarbon impact on an oil economy has been tackled by many economists over the years and demonstrates that oil and gas revenues have many benefits if the countries have utilised them successfully. However, many of these countries have found out that these windfalls, based on exhaustible (non-renewable) resources, become more a curse than a blessing particularly in the developing countries, which have suffered from a poor institutional system, and this is of great interest to some economists. In addition many researchers have found that there is a relationship between resources and rent seeking, particularly when the country depends heavily on these resources and is perceived as lacking in political maturity. Several fiscal policies have been adopted by resource exporting countries mainly for addressing the negative adverse of the so called resource curse, among those policies, diversification seems to be the most important on dealing with the dependence of such economies on the export of their resources. This paper deals with the economic diversification and fiscal policy orientation in Algeria. It contains the novel suggestions for diversification rules applied in Algerian economy.