Hydrocarbon Revenues and Their Impact on Economic Diversification in Algeria: An Econometric Study Using the NARDL Model for the Period 1970-2024.

Abstract

This research paper aims to investigate the impact of hydrocarbon revenues on economic diversification in Algeria. It seeks to determine the extent of Algeria's success in utilizing these revenues to build a diversified and sustainable economy based on various productive sectors. The study employs quantitative methods, specifically the Non-linear Autoregressive Distributed Lag (NARDL) model, covering the period from 1970 to 2024.

The results indicate that the Algerian economy suffers from symptoms of the "Dutch Disease" and the "Resource Curse," as rising hydrocarbon revenues negatively affect economic diversification in the long run. This reflects a decline in the competitiveness of productive sectors during periods of financial abundance. Finally, the study proposes a set of recommendations to achieve economic diversification, such as investing in human capital, improving the business climate, and reinvesting oil revenues into productive sectors.