Abstract: Egypt has been unable to sustain rapid economic growth in the past, nor has it been able to generate employment opportunities at a fast enough rate to keep unemployment from rising. It will be argued in this paper that this has been the result of significant implicit taxation of the agricultural sector. The latter has slowed the structural transformation of the Egyptian economy, increased the capital intensity of production in the urban sector, and slowed overall economic growth. The Egyptian experience is contrasted with that of South Korea and Taiwan. The results indicate that indeed structural change in Egypt has been slowed by the implicit taxation of agriculture.
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