The political economy of transformation in the Arab region: Story of fiscal disclosure in Egypt

Almost three years after the 2010 popular uprisings, the ERF region’s double transition, political and economic, remains complex. Most importantly, political and economic transformations can interact in ways that will be more potent than in the past, and which can produce good or bad economic and political outcomes. In response to these recent political changes, the Economic Research Forum (ERF) launched a call for papers under the research theme of “Political Economy of Transformation in the Arab World”. Under this competition and after a peer-review process, ERF selected 6 out of 16 research proposals. A workshop is being held today and tomorrow, October 27-28, to discuss the draft papers and their preliminary findings among authors and experts in order to improve the final output. Entitled “The political economy of transformation in the ERF region“, the workshop is also intended to promote interaction between researchers with interest in the topic.

Opacity in the attire of transparency – The story of fiscal disclosure in Egypt

Are improvements in fiscal transparency in Egypt endogenous to fiscal outcomes?” is the title of one of the papers to be discussed today. The paper discusses the fiscal disclosure in Egypt and whether it injected further transparency into the system.

Three successive waves of fiscal disclosure have taken place in Egypt starting from the late 1970s till 2007. Consequently, a lot of data were gradually included in budget reports. Data disclosed covered details on budget deficit and its main attributes such as energy subsidies and cost of fully funded pension system. Our hypothesis is that this gradual data disclosure was not aiming at injecting further transparency into the system but rather represented government-initiated reforms taken in response to other motives. How do we go around to prove this? Basically by arguing that for disclosure to be described as aiming at transparency, it has to be responsive, visible and cover the type of data demanded by Members of Parliament (MPs). Our analysis however shows that in the case of Egypt, disclosure has been nothing but responsive to budget deficit.

Read more of this post by Lobna Abdel Latif, Professor of Economics (Cairo University)

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