INSTITUTIONAL BARRIERS TO POLICY REFORM IN EGYPT - THE CASE OF THE AGRICULTURAL MACHINERY INDUSTRY

Economic reform has been on the Egyptian policy agenda since the mid-1 970s. But progress has been slow in part due to strong regulatory and institutional obstacles. The experience of the agricultural machinery manufacturing industry displays this problem. An economic analysis of manufacturing threshers shows that while the impact of price policies was about neutral, institutional barriers effectively taxed the indust ry 15-22%. The greatest obstacle was access to marketing credit from t he state-owned Principal Bank for Development and Agricultural Credit. Access to materials and difficulties with tax authorities also hamper ed the industry.