The Egyptian public sector: The control structure and efficiency considerations
| DOI | http://doi.org/10.1002/pad.4230030103 |
| Date | 01 January 1983 |
| Published date | 01 January 1983 |
PUBLIC ADMINISTRATION AND DEVELOPMENT,
Vol.
3, 27-37 (1983)
The Egyptian public sector: the control structure and
efficiency considerations
MOURAD
MAGDI WAHBA
St.
Antony
f
College,
Oxford
SUMMARY
The Egyptian public sector is labouring under a mass of legal controls which are proving an
obstacle to its efficient running. A variety
of
government agencies, as well as the Board
of
Directors and the General Assembly, are burdening each company with regulations and
demands for information. The little latitude thus allowed company managers in deciding
upon such essential problems as finance, the size
of
the labour force and the price
of
output
has had severe effects in decreasing the efficiency
of
each company and
of
the sector as a
whole. Some dynamic company managers are trying to find a way around the system, but this
is having negative efficiency and welfare effects. Examples
of
the negative effects
of
the mass
of
controls
on
problems such as finance and pricing are given in the article. Attempts at
forming joint ventures, in order to escape the oppression
of
belonging to the state, have
been made by some companies, but these have met with union opposition in some cases
although the state seems to encourage the reduction in investment outlay which this policy
might have. The article develops the analysis
of
the politico administrative framework
of
economic activity presented by Ayubi
(1982).
Beginning in the late 1950s as a timorous attempt by the state to co-operate with
the private sector in bringing about ‘economic development’, the public sector in
Egypt became the spearhead of the ‘socialist’ drive for development and industrial-
ization. The primacy
of
the public sector in the economy
of
Egypt and its leading
role in developing and industrializing the country only started to be questioned,
both in academic circles and in the press, towards the mid-1970s’ with the shift
towards more liberal policies. There seem thus to have been three main stages in
public sector policy since its inception in the
1950s.
First, Egypt’s young government
tried
to
create a public sector subservient to private and foreign sector interests. In
the second period, starting from the base created in the 1950s and coming after the
traumatic clash with the West caused by the 1956 Suez War and the refusal
of
the
United States to finance the Aswan High Dam, the government turned to more
resolutely ‘socialist’ techniques, and greatly strengthened the public sector. In the
third period, subsequent to the 1973 October War and the
Infitah
liberalization
policies, the critics of the public sector became more outspoken in their attacks, and
laws were passed relaxing government control over the economy, and allowing the
public sector to enter into joint ventures with foreign companies.
By now, there is general confusion regarding the aims
to
be followed by the
public sector in Egypt, and regarding the intentions
of
the government and policy
makers towards the sector. This article is an attempt at clarifying the institutional
Mr
Wahba is
from
the American University, Cairo and is currently at
St.
Antony’s College, Oxford
0271-2075/83/010027-11$01.10
0
1983
by John Wiley
&
Sons,
Ltd.
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