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Economic Growth in Egypt: Constraints and Determinants

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  • Anton Dobronogov
  • Farrukh Iqbal

Abstract

Egypt accelerated its ongoing transition from a public sector dominated economy to a private sector led and market oriented economy after the collapse of oil prices in the mid-1980s. Some aspects of the economy, such as trade policy, have been substantially transformed since then whereas other aspects, such as public control of the financial sector, have experienced less change in substance. We examine some determinants of growth in Egypt since the mid-1980s using insights from both standard econometric techniques and a diagnostic approach proposed by Hausmann, Rodrik and Velasco (2004). We find that trends in government consumption, credit to the private sector and the average growth rate of OECD countries have been significant determinants of growth in Egypt in the past. We also present evidence that suggests that inefficiency of financial intermediation is a significant current constraint on growth.

Suggested Citation

  • Anton Dobronogov & Farrukh Iqbal, 2007. "Economic Growth in Egypt: Constraints and Determinants," Journal of African Development, African Finance and Economic Association, vol. 9(1), pages 31-66.
  • Handle: RePEc:afe:journl:v:9:y:2007:i:1:p:31-66
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    References listed on IDEAS

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    6. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series,in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
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    Citations

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    Cited by:

    1. Klaus-Stefan Enders, 2007. "Egypt—Searching for Binding Constraints on Growth," IMF Working Papers 07/57, International Monetary Fund.
    2. Kamal, Mona, 2013. "Financial Development and Economic Growth in Egypt: A Re-investigation," MPRA Paper 48564, University Library of Munich, Germany.
    3. Ammar Jreisat & Hassan Hassan, 2016. "Banking efficiency in Egypt: an application of data envelopment," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 11(2), pages 101-119.
    4. World Bank, 2007. "Arab Republic of Egypt : Poverty Assessment Update, Volume 1. Main Report," World Bank Other Operational Studies 7642, The World Bank.
    5. Bargawi Hannah, 2014. "Economic Policies, Structural Change and the Roots of the “Arab Spring” in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 10(3), pages 1-28, December.
    6. Juliane Brach, 2008. "Constraints to Economic Development and Growth in the Middle East and North Africa," GIGA Working Paper Series 85, GIGA German Institute of Global and Area Studies.
    7. Brach Juliane, 2010. "Technology, Political Economy, and Economic Development in the Middle East and North Africa," Review of Middle East Economics and Finance, De Gruyter, vol. 5(3), pages 1-23, February.
    8. Soliman, Ibrahim & Mashhour, Ahmed & Gaber, Mohamed, 2011. "A review of The National and International Agro‐Food Policies and Institutions in Egypt," MPRA Paper 66779, University Library of Munich, Germany, revised 15 May 2011.
    9. Shima'a Hanafy, 2015. "Sectoral FDI and Economic Growth — Evidence from Egyptian Governorates," MAGKS Papers on Economics 201537, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Luisanna Onnis & Patrizio Tirelli, 2010. "Challenging the popular wisdom. New estimates of the unobserved economy," Working Papers 184, University of Milano-Bicocca, Department of Economics, revised Apr 2010.

    More about this item

    Keywords

    Egypt; economic growth; constraint factors; determinant factors; public sector; private sector; market economy; government consumption;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

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