Comparative political economy of the IMF arrangements after the Arab uprisings: Egypt and Tunisia

Abstract

In the post-uprising period, while Tunisia was relatively successful in its negotiations with the International Monetary Fund (IMF), which provided it with a stand-by agreement in the amount of $1.74 billion, Egypt remained far from reaching any agreement. In an attempt to explain the difference between the IMF experiments in the two countries, that is, the factors leading to the signing of an agreement with the IMF or the inability to do so, this article proposes two arguments, based upon one positive and one negative factor: (1) distinctive domestic political dynamics and (2) the availability of alternative resources. In the two cases, the article argues that the IMF experiment was more successful in Tunisia because Tunisia enjoyed a more suitable domestic political environment which promoted and enabled reforms and thus enabled the negotiations with the IMF. Tunisia also lacked alternative resources that could be used as substitutes for the IMF loan. On the other hand, the IMF negotiations were not successful in Egypt as mounting social and political opposition decreased the ability of the government to maintain economic reforms and negotiate an IMF loan and the existence of alternative resources created disincentives. Furthermore, not only pointing out the importance of 'alternative funds' and the 'domestic political environment' with regard to the demand side of the IMF loans, this article also debates the relative strengths of the variables, and argues that alternative funds matter more than the domestic political environment.

Between affordable welfare and affordable food: Internationalized food subsidy reforms in Egypt and Tunisia

“…The proposed causal relationship is straightforward: the higher the financial dependence, the more likely the emergence of reform coalitions that strategically implement internationally demanded policies. Hecan (2016) and Adly & Meddeb (2020, p. 49) render this connection visible in their analysis of Egypt and Tunisia's IMF packages after 2010. They show that Egyptian elites were able to evade IMF reform pressure in the year that followed the coup d'état in 2013 because they received sufficient bilateral aid from Gulf monarchies.…”

Revolution, Change, and Democratic Transition in Egypt Since 2011: A Critical Political Economy Approach

“…To qualify for the IMF loan, he attempted to implement structural reforms that increased taxes on various essential goods and services. However, fearing for his regime because of growing protests, Morsi revoked the IMF-induced reforms (Hecan, 2016). In retrospect, this move came too late to save his administration.…”

The politics of public land dispossession in Egypt: 1975–2011 and beyond

“…In the aftermath of the Egyptian uprising of 2011, the Muslim Brotherhood (MB) gained power, between 2012 and 2013 under then-president Mohamed Morsi. Misunderstanding the uprising's rejection of neoliberal political-economy (authoritarian or otherwise), Morsi continued with the same economic IMF policies as his predecessor, albeit now under a democratically elected government (Hecan 2016: 774–5). Indeed, the Brotherhood's leaders had gradually embraced neoliberalism during the decades prior to 2011.…”