MBL Mohamed Baraa Lafi
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March 2026 Working Paper Draft available

What Would Saudi Arabia Look Like Without Vision 2030? Early Evidence from Synthetic Controls

Mohamed Baraa Lafi Paris School of Economics (PSE) — Synthetic Control Method
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Abstract

This paper studies the main early effects of the Vision 2030 reforms on their target sectors, ten years after their announcement (April 2016 to April 2026), using the Synthetic Control Method to address the question: "What would Saudi Arabia look like without Vision 2030?". By constructing a credible counterfactual for Saudi Arabia from a donor pool of structurally comparable economies, the paper estimates the causal contribution of the reform across four sectors central to economic diversification: female labor force participation, foreign direct investment, international tourism, and services employment.

The results provide early evidence of positive effects. Female labor force participation exceeded its counterfactual, reaching a gap of nearly 15 percentage points by 2023. FDI inflows surpassed the synthetic benchmark by 15 billion USD by 2023, with a cumulative treatment effect of 41 billion USD. Tourism arrivals exceeded the counterfactual by approximately 20 million visitors by 2024, with a cumulative treatment effect of approximately 48 million additional arrivals over 2017–2024, while employment in services expanded by about 10 percentage points beyond its predicted trajectory.

Placebo tests and permutation inference confirm that these divergences are unlikely to reflect chance or common regional trends. Taken together, the findings suggest that Vision 2030 is associated with significant and measurable structural transformation across all four dimensions examined.

Keywords

Vision 2030Saudi ArabiaSynthetic Control MethodEconomic diversification Foreign direct investmentTourism developmentFemale labor force participation Services employmentStructural transformation

JEL Classification

C21C33O11O53Q33J16

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