Sectoral Transformations in Neo-Patrimonial Rentier States: Tourism Development and State Policy in Egypt

Thomas Richter () and Christian Steiner

No 61, GIGA Working Papers from GIGA German Institute of Global and Area Studies

Abstract: This article challenges claims that liberalising state regulated markets in developing countries may induce lasting economic development. The analysis of the rise of tourism in Egypt during the last three decades suggests that the effects of liberalisation and structural adjustment are constrained by the neo-patrimonial character of the Egyptian political system. Since the decline of oil rent revenues during the 1980s tourism development was the optimal strategy to compensate for the resulting fiscal losses. Increasing tourism revenues have helped in coping with macroeconomic imbalances and in avoiding more costly adjustment of traditional economic sectors. Additionally, they provided the private elite with opportunities to generate large profits. Therefore, sectoral transformations due to economic liberalisation in neo-patrimonial Rentier states should be described as a process, which has led to the diversification of external rent revenues, rather than to a general downsizing of the Rentier character of the economy.

Keywords: Egypt; rentier state; economic liberalisation; economic development; tourism (search for similar items in EconPapers)
JEL-codes: H27 L83 O11 P26 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gigawp:61

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