Thomas Richter () (GIGA German Institute of Global and Area Studies) Christian Steiner () (Centre for Research on the Arab World (CERAW))
Abstract
This article challenges claims that liberalising state regulated markets in developing countries may induce lasting economic development. The analysis of the rise of tourism in Egypt during the last three decades suggests that the effects of liberalisation and structural adjustment are constrained by the neo-patrimonial character of the Egyptian political system. Since the decline of oil rent revenues during the 1980s tourism development was the optimal strategy to compensate for the resulting fiscal losses. Increasing tourism revenues have helped in coping with macroeconomic imbalances and in avoiding more costly adjustment of traditional economic sectors. Additionally, they provided the private elite with opportunities to generate large profits. Therefore, sectoral transformations due to economic liberalisation in neo-patrimonial Rentier states should be described as a process, which has led to the diversification of external rent revenues, rather than to a general downsizing of the Rentier character of the economy.
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Paper provided by GIGA German Institute of Global and Area Studies in its series GIGA Working Paper Series with number
61.
Find related papers by JEL classification: H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
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