The political economy of reform: Egypt in the 1980s

In the 1980s the Egyptian authorities entered into an agreement with the IMF to undertake a series of major policy reforms, including changes in the exchange rate regime, the government budget, the food subsidies, and the deficits of state-owned enterprises. Within a year, these policy changes had been reversed, and the Egyptian economy reverted to a state of crisis. The authors analyze the 1986 macroeconomic crisis and reform policies, but they also contrast that response with a series of policy reforms undertaken by the Ministry of Agriculture at the same time regarding controls over agricultural production, which they deem to have been highly successful. Egypt thus represents a case in which an economic crisis came about once there were no further beneficial external circumstances to permit the perpetuation of existing economic policies, and where macroeconomic policy reform failed while agricultural reforms could nonetheless be implemented. -from Editors