Since 1973 Egypt has been trying to expand the role of marked forces in its economy in the hopes of spurring growth. Yet real policy change has been painfully slow and the Egyptian economy is currently stagnant.
In Political Vegetables? Yahya Sadowski explains that the primary obstacles to development in Egypt are political, not economic. Through a detailed study of the agricultural sector, he documents how consumers, bureaucrats, and businessmen have benefited from the subsidies and rents created by the existing pattern of state intervention. He shows how these groups manipulate the Egyptian policy to secure their own profits and insulate themselves from risk-thereby, unintentionally but systematically, sacrificing any chance for national economic development.
Sadowski points out that efforts by the International Monetary Fund and the U.S. Agency for International Development to spur economic reform in Egypt have foundered because they misunderstood these political obstacles to change. These Western institutions have promoted the power of Cairo’s business community, inadvertently strengthening its ability oppose reform. Their attempts to pressure Egypt into reform by cutting back aid and denying debt rescheduling tend to backfire, reducing funds for legitimate social investments without reducing waste and market distortions.
He concludes with potential solutions explaining that if countries like Egypt are to develop, policymakers in Cairo and abroad will have to pay greater attention to the political calculus of reform. And to make economic reform viable, they will have to devise programs that increase the effectiveness of government, reduce corruption, and alter the patter of collaboration between the state and private sector oligopolies.
Yahya M. Sadowski is a senior fellow in the Brookings Foreign Policy Studies program and a lecturer in the Department of Middle East Studies at Johns Hopkins University.