The purpose of this study is to expound the dilemma that, in spite of the huge wealth of Saudi Arabia, its drive for development and modernization is stumbling. This situation is due to a large extent to the country's severe administrative limitations.

Over the past five decades, the Saudi government has adopted many agricultural policies aimed to: achieve self-sufficiency of food, increase the participation of the agricultural sector in the economy, and reduce the consumption of irrigation water. Due to conflicts among government objectives and the incompatibility of farmers' objectives with those of some agricultural policies, the government has not been able to fully achieve its objectives. To accomplish its goals the government, or decision maker needs to understand the farmer, or follower, reaction when s/he adopts a new decision. The dissertation aims to build a model that achieves government goals of minimizing the total irrigation water used while improving the total revenue from agricultural production, while incorporating farmers’ objective of maximizing their profit. To do this, linear programming and bi-level multi-objective multi-follower models are developed and applied to six regions of Saudi Arabia, which account for around 70 percent of cropland and consume about 13.131 BCM of irrigation water per year. The result of the linear programming model applied to the Riyadh region shows there is an unobserved factor effect on the farmers’ decisions, including irrigation water demand that comes from the presence of indirect subsidies. On the other hand, the bi-level multi-objective, multi-follower model shows there is the possibility to minimize irrigation water consumption while maintaining current total revenue from crop production through reallocating irrigation water among regions, while applying a variety of crop specific tax and subsidy policies among the regions to alter planting decisions.

Corporate governance practice differs regionally and nationally, depending on how each legal environment protects minority investors, capital markets and company ownership structure. Governance can also change spectacularly in regions or countries with comparatively high levels of institutional investment. The notion of institutional investors' activism is increasingly important in developed markets as the ideal corporate governance mechanism to monitor corporate managers and overcome agency problems arising from dispersed corporate ownership in modern companies. These institutions can work together on an improved corporate governance framework more effectively than individual investors, monitoring corporate controllers of listed companies in emerging and developing markets, using their influence more vigorously and in ways more fitting to a concentrated ownership environment such as that in Saudi Arabia. Consequently, the role of institutional investors in emerging and developing markets will depend strongly on institutional investors' activism and the arrangements determined and undertaken by the corporate governance regulatory framework in these markets. In considering the influential role of institutional investors to improve corporate governance practice, a high level of minority shareholder protection thus remains an indicator of good corporate governance and regulatory pressure of rights and incentives, which are necessary to empower non-controlling shareholders in these concentrated ownership markets to exert a strong activist influence in monitoring corporate activities, thus improving the corporate governance practices of investee companies. In this context, this thesis contends that in Saudi Arabia in particular, shareholder involvement in corporate governance is inadequate, as a result of a variety of economic and regulatory obstacles. It goes on to identify what improvements are necessary and where, to ensure a sound framework for effective institutional investor activism and to improve the level of minority shareholder protection. It also cautions Saudi legislators against erecting hurdles to the future engagement of Saudi and foreign institutional investors in monitoring corporate activities which may affect the conditions for access, allocation and monitoring of equity, which is so important for value creation and sustainable economic growth. The main benefit to be derived from this research is that it facilitates a fuller understanding of the Saudi approach to corporate governance, the corporate ownership environment and trends in the capital market. The analysis also deepens knowledge of corporate governance regimes, including the role of institutional investors, and of their characteristics and investment behaviours. In short, it considers whether institutional investors are willing or have been encouraged to use their power to engage in the companies in which they invest and whether they are qualified to solve the agency problem.