This study aimed to measure the impact of trade openness on government spending in Libya during the period 1990–2020, in the context of a rentier economy and fluctuating oil revenues. An autoregressive distributed lag (ARDL) model was adopted to test the long-run relationship between the variables using a bounds testing approach. The study results revealed a long-run equilibrium relationship between the degree of trade openness and government spending, with an error correction coefficient of -0.13 demonstrating a partial speed of adjustment of imbalances toward equilibrium. The estimation results indicate a significant positive effect of trade openness on government spending, with an elasticity of 0.88, supporting the compensation hypothesis, which assumes that governments in open economies tend to increase public spending to protect the economy against external shocks. The study recommends aligning public finance policies with shifts in international trade to ensure the sustainability of public spending in a highly volatile economic environment............... Keywords:................Trade openness, government spending, ARDL model, compensation hypothesis, cointegration.