In order to avoid the misallocation of resources, these externalities have to be internalised either by aligning the incentives of the decision maker; introducing a more representative decision-making process; putting in place the appropriate institutional arrangements; having effectively enforced laws, rules and regulations; or occasionally, by societal norms. Secondly, sound financial governance encourages discipline in adhering to the budget constraint. All economic agents are bound by inter-temporal budget constraints, and adherence to it when making financial decisions is key to sustainability. This is particular relevant when the repercussions of financial decisions fall on parties who are not represented – for example, decisions that shift a large debt burden onto future generations. Thirdly, strong financial governance has robust external checks and balances. To ensure sound decision making, especially when externalities are involved, decision makers, and the decision making process, must be subjected to scrutiny by external parties. In this regard, accountability, transparency, and the empowerment of the external party to take consequential action are key to effective financial governance. All these principles apply fully to the management of public finances. Sound public financial governance is the legitimate use of authority in the management of a country’s financial resources with integrity to promote sustainable development. At the heart of it all, sound governance practices in the Government can be traced back to the concept articulated by French Enlightenment political philosopher (Baron de) Montesquieu in the 18th century.
You also ordered setting a minimum wage of Rls 3,000 for all Saudi government employees, allocated a monthly amount of Rls 2,000 for job seekers, and raised capital of the Saudi Credit and Saving Bank by Rls 30 billion. The number of family members covered by the social security was increased from 8 to 15 with an allocation of Rls one billion for that purpose. The government subsidies for charity associations rose by 50 percent to Rls 450 million annually, and needy families’ sons and daughters were supported to join  BIS central bankers’ speeches  1  universities through allotting them a portion of seats, facilitating their admission requirements, and exempting them from some tuition fees. This package of honorable royal decrees will enhance the standard of living of the least-income segment of population and promote its ability of saving and, thereby, raise its future productivity and income, and reduce poverty, to which you always attach considerable attention. In the health care arena, you ordered supporting the Ministry of Health with Rls 16 billion in order to carry out the expansion of a number of hospitals and health centers. You increased the maximum limit of the Ministry of Finance’s financing program of private hospitals from Rls 50 million to Rls 200 million. This would hopefully enhance health care services in the Kingdom.