Wednesday, March 02, 2011

So if only "genuine free-market competition" came to Egypt all would be well

"But, as a recent study by the political scientist Oliver Schlumberger shows, reform did not, for the most part, aim at introducing genuine free-market competition, the most important feature of a healthy capitalist system. Instead, it strengthened what he calls “patrimonial capitalism”—a system in which the key determinant of success is how close you are to those in power. This helps explain the widespread resentment in Egypt at Gamal Mubarak’s reform program. The program did include real reforms, which made it easier to start new businesses and the like, but it also enriched Mubarak’s cronies, solidifying the hold of powerful insiders on the economy and confirming people’s sense that the system was rigged." (thanks Redouane)