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Egypt as the 40 percent nation

Egyptian plainclothes police officers arrest a cameraman during a recent protest in downtown Cairo. A free press is hardly a given there.

Associated Press

Egyptian plainclothes police officers arrest a cameraman during a recent protest in downtown Cairo. A free press is hardly a given there.

In the 1990s, at the height of the democratic revolutions, many people assumed that getting rid of the dictator was the hard part. If the people in a country could topple the old regime, then their country would make the transition toward democracy.

But in 2002, Thomas Carothers gathered the evidence and wrote a seminal essay called "The End of the Transition Paradigm," pointing out that moving away from dictatorship does not mean moving toward democracy. Many countries end up in a "gray zone," with semifunctioning governments and powerful oligarchies.

A mountain of research has established that countries with strong underlying institutions have better odds of making it to democracy. Some scholars argue that political institutions matter most — having independent political parties. Others say social institutions matter most — having a cross-cutting web of citizen, neighborhood and religious groups.

So I've been reading reports from the United Nations, the World Bank and others to see what they say about the strength of Egypt's institutions. These reports give the impression that Egypt is a place where people are trying to lead normal, middle-class lives, but they are frustrated at every turn by overstaffed and lethargic bureaucracies.

Egypt does a good job of getting kids to attend elementary school, high school and college. But the quality of the educational system is terrible, ranking 106th out of 131 nations in one measure. The U.N. Human Development Index, which is a broad measure of human capital and potential, ranks Egypt 101st out of 182 countries.

The quality of government agencies overall is a tad better. The World Bank Institute puts Egypt at around the 40th percentile when it comes to government effectiveness. It puts Egypt in the 50th percentile when it comes to the quality of regulations and rule of law. Where it really lags is in measures of responsiveness and accountability. Egypt's government agencies are among the least responsive on Earth.

The government's economic reform effort illustrates the strengths and weaknesses of the governing institutions. The World Bank gives Egypt high marks for its efforts to move from a centrally planned to a more market-oriented economy. For example, an entrepreneur now has to go through only six procedures to start a company, taking an average of seven days. In 2007, Egypt ranked 165th out of 175 nations in ease of doing business. By 2011, it had moved up to 94th out of 183.

But corruption levels are around the global average, which is to say, corruption is rife. It takes 218 days to get a building permit to put up a warehouse, with all the attending bribes. The effort to privatize state-owned enterprises turned into an enrichment scheme for cronies of the regime.

Overall, Egypt's competitiveness is mediocre but not terrible. The World Economic Forum ranks Egypt 81st out of the 139 nations it evaluates. When you look inside the economic rankings, you see that Egypt does fine on many of the short-term decisions, like having a flexible wage structure, but it does horribly on long-term things. Its companies devote very little money to research and development. It is suffering from one of the worst brain drains in the world.

Socially, the country seems stymied. Up until Hosni Mubarak's fall, Egypt had been a place where people have tried to build informal groups like unions and professional organizations, only to see the government move in to stifle or co-opt their efforts. The country has some nongovernmental organizations, but far fewer than the global average, and those that exist are restricted by the government. Journalists have tried to create a space for a free press, but with only moderate success.

The biggest gap, by far, has been political. Mubarak had successfully prevented political parties from forming, with limited exceptions like the Muslim Brotherhood. Party-building is the country's screaming need and should be the top priority for outside assistance.

Egypt is in much better shape than Iraq was under Saddam Hussein or Gaza was before Hamas took over. It's a 40 percent nation, mediocre in the world rankings, but not a basket case. Surveys showed that until about a week ago, Egyptians had extraordinarily low expectations for the future, among the lowest in the world.

But now things seem to be changing. And while you wouldn't say that Egypt possesses the sort of human, social and institutional capital that will enable it to achieve miracles over the next few years, you'd have to say it has some decent underlying structures. And, if led wisely, it has a reasonable shot at joining the normal, democratic world.

Egypt as the 40 percent nation 02/12/11 [Last modified: Saturday, February 12, 2011 3:30am]
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