The policy of Saudization of jobs and replacement of non-Saudis with Saudi manpower was initiated in the Fourth five-year development plan, covering the years 1985-1989 and this policy was continued in the Fifth, Sixth, Seventh, and Eight Development Plans. Government posts have been successfully filled with Saudi nationals since the oil boom, to the extent that they reportedly accounted for 78 percent of the government sector. However, Saudization in the private sector has virtually failed. Although 57.1% of total expenditure earmarked for development agencies was allocated to human resource development during the Seventh Plan, covering the years 2000–2004, the employment of Saudi manpower in the private sector still remained at the low level of 35.5 percent. Hertog tries to find the reasons of policy failure from the micro-analysis. He argues that the failure of this policy shows how the state’s capacity to implement economic policy for solving urgent long term economic problems is challenged by the segmented “spoke and hub” bureaucratic system, and patron-client relations among princes and bureaucrats and brokers. However, this micro analysis has some limitations to explain the real macro-picture of this policy failure hidden behind retierism. In the 7th National Dialogue in Buraidah, Minister of Labor Ghazi al-Qusaybi mentioned that “his ministry had to succumb to the demands of a large swathe of the society which opposed his ministry’s policy of minimizing foreign recruitment, mainly because of the Kingdom’s economic boom.” His comment has a lot of meanings regarding the relationship between the Saudi labor market and rentierism. As he mentioned, economic boom based on the huge inflow of oil revenues is superficially main barrier to implement Saudization policy. However, this mention gives us some basic questions regarding correlation between Saudi labor market and oil rent. In my view, the failure of Saudization policy is deeply rooted in the legacy of rentierism. Historically, rentierism of the Kingdom has contributed to the development of “rentier mentality” and inefficient educational system which discourages the inflow of local labor forces into the private sector. In addition, Saudization policy exposes the Saudi government to potential political risks which cause negative outcome of “group formation effect,” one of main mechanism of rentierism, because the replacement of expatriates with local workers in the private sector may lead to the formation of labor unions. In my research, I will demonstrate the negative effects of rentierism on Saudization from a historical perspective.