The Future of Egypt: Time to Go On the Record

Are we discounting. If we are, then over the ten-year period I suspect the situation to get worse. The disturbances of peace, which will be detrimental to other components of the metric, will likely dominate. 40% worse, 45% plateau, 15% better.

60% better, 30% plateau, 10% worse.

Considering that the Mubarak regime was literally bombing Coptic churches and then blaming it on al-Qaeda to get sympathy and support from the West, it’s hard to see how things could get much worse.

[Comment removed pending confirmation of email address and for nonresponse to previous email validation requests. Email the webmaster@econlib.org to request restoring your comment privileges. A valid email address is required to post comments on EconLog.–Econlib Ed.]

I suppose that a “baseline” would be 33% / 33% / 33% (whatever that means) and we’re trying to place our odds against that.

Considering that there is no (classical) liberal ideology that can speak up without being repressed, I bet that despite the aspirations of many people, the personal freedom index will go down with 65% probability, stagnate with 25% probability, improve with 10% probability.

As for economic freedom, I predict that it will improve slightly in the beginning, since that’s probably how the new power will buy its stability, and new corruption structures won’t have the time to build up as bad as the old ones immediately. And the other hand, even with good will, it’s not obvious that people in power have any clue, much less the will to cut deep into established privileges. So make it improve 40%, stagnate 40%, get worse 20%.

For peace, I don’t see how things could “improve” as the region is going to get less stable, with unreliable bankrupt US incapable of maintaining its hegemony, while radical islamists tone up the discourse. However, the ruling elites don’t want a war that would compromise their revenue stream, topple them if they lose, and embarrass them tremendously if they win. Therefore I predict improve 5%, stagnate 80%, get worse 15%.

I predict that GDP will move as an aggregate of the former, so predicting the same as the total outcome: improve 18%, stagnate 48%, get worse 33%.

Interestingly, closer to your estimate than I would have thought beforehand.

Probably worse in the short and long term. There are simply no surrounding cultural influences to guide the Egyptians to better governmental and economic philosophies, as opposed, let’s say, to what the East Germans or the Czechs had in 1990. Thus, I expect a somewhat hot civil war to erupt within a year of the coming elections as the losers will be unsatisfied with the results and will return to the streets with guns.

I’m cautiously optimistic:

33% better, 50% plateau, 17% worse. I’ll further predict that personal freedom would be the main driver in improving the index. Economic freedom will likely remain somewhat low and GDP per capita will therefore follow suit. Peace is the main area I see where things could get worse, because for the last couple decades Egypt has been on reasonably good terms with its neighbors.

By the way, some of my optimism comes from the fact that my worst fears were not born out in Iraq. (Given how badly things DID turn out, you can imagine how horrific my worst fears were!)

Percentages create an artifical impression of certitude. I think a better way would be to define a best and worst case that seem equally probable.

With Egypt, I think the best case would be if it began to look something like Turkey. The military installs a secular modernizer with at least a fig leaf of democracy, but then goes back to the barracks and does not interfere in daily politics. The worst case is that the military decides to actively participate in regular politics, rapidly becomes as corrupt and dysfunctional as the rest of Egypt, and ends up even more oppressive and plutocratic.

90% percent sure that the islamists will gain more power than they have now, and that the military will continue operating as a socialist style government run corp for most of the goods and services as it does now.

I’d put money on it, if anyone is willing to place bets.

I think Cassander is going to be wrong 22.95% of the time.

Cassander,

Your best case scenario sounds about right, but I think your worst case is too rosy. For me, a worst case scenario would involve a takeover by the Muslim Brotherhood, followed by either an attack on Israel, a closure of the Suez canal, or some kind of ethnic cleansing or genocide of the Coptic population. Civil war is also a possibility.

My crystal ball doesn’t go that far into the future. For predicting the near future I only have one bit of advice: the revolution isn’t over.

For the optimists among us, check out the Pew Research poll of Egyptians. 84% favored capital punishment for anyone leaving the faith. The rest of the survey was no more encouraging. Egyptians don’t have the tolerance for differences and respect for freedom that democracy needs. They may not agree with the tactics of the MB, but they certainly agree with the MB’s philosophy and will therefore support it.

The demonstrators did not represent the majority of Egyptians. Sure, if the demonstrators themselves could take control, Egypt might have a chance at democracy. But the majority of the people want an Islamic state. That means no freedom.

More importantly, socialism has become the Islamic economic system. The MB and all conservative Islamic groups see socialism as Islamic. It’s partly due to the influence of Iran and partly as a reaction to their seeing the West as Christian and capitalist. They’re wrong on both counts, but that’s their impression.

I claim no special knowledge of Egyptian political culture or the level of current influence various parties have. Still, I think this is an interesting exercise.

Starting from Faré’s 33/33/33 baseline, I’ll begin by noting 3 things:

— A (very) weak analog of the efficient markets hypothesis would argue that on average (if with very high variance), the difference in political cultures between Egypt and Switzerland should already be reflected in the differences in their governments today. Because of that starting point, I’m not going to focus on the negatives that I am aware of in Egyptian political culture, since I don’t have a model better than the efficient markets analog to argue for how those negatives might express themselves.

— Over very long periods of time (say, 200 years or even 3000 years), the quality of government in the average state as measured by the proposed metric has been improving. If I know nothing else, this trend should encourage me to bias my estimate towards a higher chance of improvement than worsening.

— Changes in technology over the last 200 years have increased the impact on the average person of both good and bad central government decisions. If this trend is ongoing, I should tend to estimate higher variance at potential inflection points, and therefore a smaller chance of plateau than the historical average.

There is more I could try to do to review historical experience so that the numbers I pick mean something quantitative rather than just expressing an intuition, but for now I’ll settle for transforming 33/33/33 into 35/20/45 as a way of expressing that I expect extra variance and mild upward drift compared to history.

I like what Telnar said.

10% significantly better, 30% very slightly better, 50% stagnate, 10% worst

@Lars P:
“This is not a new revolutionary regime. It is the 60 year old military regime who removed a failed CEO.”

I agree, only now they seem to have brought in the MB which had been previously excluded.

Blackadder> The point isn’t an absolute worst case, but a probable worst case. A couple weeks ago I was worried about an Iran style revolution, but I no longer consider that very likely. The Egyptian military seems to be sticking together and not going anywhere, and as long as that is the case, no one else can come to power. Even if they did, however, I would consider it extremely unlikely that they would close the canal or attack Israel. The Egyptian government derives a lot of revenue from the canal and can’t afford to shut it down. As for an attack, if they did, the war would be over quickly and the Egyptians would lose badly. Again. Even if the MB doesn’t know this, the Egyptian military certainly does, and I can’t imagine it accepting orders to humiliate themselves, destroy their extremely expensive equipment, and cut themselves off from replacements parts all in one go.

What I think will happen is the military appointing a government that will maintain the status quo, and the status quo is slow decline.