**5. Conclusion**

This chapter employs yearly data over the period (1989–2015) for oil and gas revenues, total government expenditure and GDP growth to estimates the relationship between them using vector error correction model (VECM). Moreover, the sectoral relationship with the economic growth is examined using the ministry of health and ministry of education expenditures. The results show that oil and gas revenues have a positive impact on economic growth while the government expenditure affects economic growth negatively. However, when looking at the individual impact of education and health expenditure on economic growth, the estimation results indicate that both have a positive impact on economic growth of Bahrain.
