Saturday, February 19, 2011

Decentralization and Democratization in Egypt

This new Urban Institute paper on Egypt (we do have a small international policy center) argues that while democratization in Egypt is important, they also need to pursue a process of policy decentralization. Policy making in Egypt is highly centralized, apparently. Less than 16% of Egyptian public spending goes on at the local level, compared to over double that in Cambodia, Mozambique, or Afghanistan. Democratization is important. Constitution writing is important. Decentralization, though, cannot be forgotten.


  1. The first thing they need in Egypt is a system for speedy registry of business and property.

    Once that is done, we'll see banks willing to lend to Egypt's giant informal sector and see a boom in contracts and deals they get from wealthier firms at home and abroad.

    Egyptians also live in closed housing spaces, sometimes three families to a small room. A better legal system in Egypt will lead to a massive housing expansion beyond the suburbs of Cairo and Alexandria.

    I can imagine democratic pressures against a better legal system however. In India, the Constitution does not recognize property rights in any sense or form - it is not even mentioned. Politically, it was far more profitable for the government to control all land allocation and decide who gets how much land. It also makes a nice living for middle class people who enter the land allotment bureaucracy - these people vote.

    I am so jealous of la monde Anglo-Americaine and Continental Europe that they had the time to implement institutional reforms before they had democracy. Magna Carta was created long before democracy and in a third world country where implementation of democracy precedes rule of law - the result is chaos as it was in Nkrumah's Ghana. It makes me even more annoyed sometimes that western people think it's a "democratic deficit" that causes problems in the poor world - western people built their institutions before democracy.

  2. Well said, Prateek.

    Decentralized power - markets, democracy, etc. - are phenomenally progressive. But people often embrace both of these without considering the institutional framework that the decentralized power is operating in. The institutions governing markets, of course, are property rights. And the arrangement of property rights makes all the difference between whether we have a thriving economy or a plutocracy that manages to bake the surface of the Earth in a matter of a century or two. Democracy is fantastic, but its institutional environment makes the difference between electing a Roosevelt on the one hand and a Hitler on the other.

  3. Like you said, democracy in Egypt will mean nothing if it takes ten layers of bureaucracy to reach from the information collector to decision maker.

    While none miss colonial days, the British at least kept a bureaucracy tinier than a single municipal government today. Post democracy, a 140 million-strong civil service in existence means that all reforms are useless chatter.


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