Protests in recent months against the international economic institutions—the World Trade Organization, the World Bank, and the International Monetary Fund—brought great intensity to their cause but not much clarity. They raised a dizzying array of issues that seems to lack any central focus. What feeds such poorly thought-out and emotional protest is pseudo-academic nonsense of the sort peddled by British academic Bush.
Despite a title suggesting an overall examination of Egyptian economic reforms, he confines himself to rural Egypt and Egyptian agriculture. His real interest lies in criticizing the bank, the fund, and the U.S. Agency for International Development—even though his own account makes clear that these institutions were not the main actors behind the reforms he attacks. They had long advocated reforms such as cash crop promotion, changes in land tenure, and market deregulation, but their proposals went nowhere until the Egyptian government decided to implement these policies wholeheartedly. Bush criticizes the reforms for pushing Egypt in the direction of its comparative advantage—ignoring that the pursuit of comparative advantage is one of the few issues on which nearly all academic economists agree and one of the few development strategies for which there is stunningly strong empirical evidence. Admitting that the growth rates have been higher since the start of the reform, he argues the more rapid growth cannot be sustained. He rails against the imposition of the tyranny of the market, preferring that the government play a more active role in the economy. He makes much of the argument that the reformers concentrated on how to raise the income of households, which he thinks is an inappropriate goal because it does not ask the question which he sees as fundamental, that is, how to raise the income of women as distinct from the income of the household of which women are a part. Nor does he shy away from offering an alternative strategy, arguing for a far-reaching land reform, including a ceiling on landholdings above 5 feddans (equivalent to 5.2 acres) that, if implemented, would mean farms would be too small to use most machinery.
This mixture of confused emotional spleen-venting, outdated Marxist ideology, and simple rejection of facts that do not fit the author’s predilections is all too typical of the critiques of the international economic institutions. Those institutions are far from perfect, but enemies like these make them look extremely good.
