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Egypt has been unable to sustain rapid economic growth in the past, nor has it been able to generate employment opportunities at a fast enough rate to keep unemployment from rising. It will be argued in this paper that this has been the result of significant implicit taxation of the agricultural sector. The latter has slowed the structural transformation of the Egyptian economy, increased the capital intensity of production in the urban sector, and slowed overall economic growth. The Egyptian experience is contrasted with that of South Korea and Taiwan. The results indicate that indeed structural change in Egypt has been slowed by the implicit taxation of agriculture. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of financial reforms on competitiveness and production efficiency of the banking sector, as well as the short-term and long-term impact on economic growth, in Egypt during 1992-2007. The results suggest that the reforms have a positive and significant effect on competitiveness and production efficiency. Also, the evidence shows that state-owned banks are generally less competitive than private banks and foreign banks are less competitive than domestic banks. The average x-inefficiency of Egyptian banks is around 30 per cent, which is comparable to those reported for other African countries. Finally, there is evidence to suggest a significant relationship between financial bank productive efficiency and economic growth in the short run but not in the long run. Overall, the results support the argument for continuing the financial sector reform programme in Egypt. [ABSTRACT FROM AUTHOR]