minister of the public business sector, Atef Ebeid, allowed
him to make the purchase with little competition. Nosseir
then sold the company after two years for more than three
times the acquisition price. Another example was the move
in the late 1990s to involve the private sector in the state
cinema industry. Again political connections implied that
only two families were allowed to bid for and operate the
cinemas—one of whom was the Sawiris family.
Egypt today is a poor nation—not as poor as most
countries to the south, in sub-Saharan Africa, but still one
where around 40 percent of the population is very poor and
lives on less than two dollars a day. Ironically, as we saw
earlier (this page–this page), in the nineteenth century
Egypt was the site of an initially successful attempt at
institutional change and economic modernization under
Muhammad Ali, who did generate a period of extractive
economic growth before it was effectively annexed to the
British Empire. From the British colonial period a set of
extractive institutions emerged, and were continued by the
military after 1954. There was some economic growth and
investment in education, but the majority of the population
had few economic opportunities, while the new elite could
benefit from their connections to the government.
These extractive economic institutions were again
supported by extractive political institutions. President
Mubarak planned to begin a political dynasty, grooming his
son Gamal to replace him. His plan was cut short only by
the collapse of his extractive regime in early 2011 in the
face of widespread unrest and demonstrations during the
so-called Arab Spring. During the period when Nasser was
president, there were some inclusive aspects of economic
institutions, and the state did open up the education system
and provide some opportunities that the previous regime of
King Farouk had not. But this was an example of an
unstable combination of extractive political institutions with
some inclusivity of economic institutions.
The inevitable outcome, which came during Mubarak’s
reign, was that economic institutions became more
extractive, reflecting the distribution of political power in
society. In some sense the Arab Spring was a reaction to
this. This was true not just in Egypt but also in Tunisia.
Three decades of Tunisian growth under extractive political