Governance Indicators; Achieving Shared Growth; Environmental Economics & Policies; Economic Theory & Research; Health Monitoring & Evaluation
Europe and Central Asia; Middle East and North Africa
Summary: The author compares the secular Islamic countries of Egypt and Turkey, both part of the Ottoman Empire around World War I. At that time both had similar levels of population, income and development. After independence, both followed an etatist development strategy, choosing to base their industrialization on import substitution and to expand their public sectors. As a result of that strategy, the author argues, the growth of productivity has been constrained in both countries. Although etatism was abandoned in Turkey in 1980, it continues in Egypt, with a huge and growing bureaucracy blocking reform. The roles of the military and of the two leading autocrats - Ataturk in Turkey and Nasser in Egypt - are contrasted to show how the differences in these military regimes affected their political and economic evolution. By analyzing the similarities and the differences between the two countries, the author reveals how real wages, economic policy, agricultural pricing, and consumer subsidies can be explained by the deeper forces of political economy. The detailed analysis of the evolution of the two economies includes discussion of land distribution, labor and product markets, and social development. An analysis of political developments during the period of democracy in Egypt from 1923 to 1952 and Turkey since 1950 is also included.
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