Economic Growth in Egypt: Constraints and Determinants

Journal of African Development, Vol. 9, No. 1, pp. 31-66

Posted: 22 Sep 2007

Multiple version iconThere are 2 versions of this paper

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.

Keywords: growth, diagnostic, Egypt, financial intermediation, binding constraint

JEL Classification: E22, E44, F43, O40, O55

Suggested Citation

Dobronogov, Anton and Iqbal, Farrukh, Economic Growth in Egypt: Constraints and Determinants. Available at SSRN: https://ssrn.com/abstract=1016223

Anton Dobronogov (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org

Farrukh Iqbal

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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