توسعه مالی، ساختار، و رشد اقتصادی: مورد مصر، 1974-2002

The paper studies Egypt's financial structure and its relation to total factor productivity (TFP) during the 1974–2002 period. It first highlights Egypt's economic performance; and then focuses on the main features of its financial sector: the banking system and the securities market. The effect of financial development on TFP is then modeled by interacting bank – and market – based financial indicators with two enabling factors, per capita income and private net resource flows. The results show that bank-based indicators have a negative effect on TFP unless they are associated with a threshold level of per capita income; whereas the effect of market-based indicators is positively reinforced by private net resource flows. The paper stresses that widening the financial sector to include the securities market has benefited TFP and growth in Egypt, but more reforms is needed towards that end.

Any system that performs what finance should perform has to have an impact on economic growth.1King and Levine (1993) initiated a torrent of empirical studies documenting this impact, which also got support from theoretical models of endogenous growth. These models, most prominently by Greenwood and Jovanovic (1990) and Bencivenga and Smith (1991), showed that financial institutions can increase total factor productivity (TFP) and the marginal productivity of capital by stimulating savers to hold more of their wealth in productive assets and by funding riskier but more productive technologies. The end result is that financial development can have a permanent and continuous effect on the steady-state growth rate of income.

The paper has analyzed economic and financial developments in Egypt over the 1974–2002 period, and has also studied the impact of relative financial structure developments on TFP and GDP growth. The following observations can be concluded from the analysis: 1. Economic and financial reforms have progressed in Egypt, but their sequencing has been disordered and they are still incomplete. In some respects, this has maintained structural rigidities and caused some serious misalignments, especially in the real exchange rate. A reordering of committed reforms is therefore needed, most notably in the areas of exchange rate management and trade liberalization.