By Ian Ayres & Jonathan Macey
The issue driving protesters in Egypt is the same that dominates elections in the U.S. and other democracies: concerns about the economy.
Many observers of the Middle East upheavals have focused on the Egyptian economy’s dismal performance. But the real story is far more complex. For President Hosni Mubarak’s recent successful economic reforms — and Egypt’s increasingly liberal policies toward business formation — may have, perversely, helped undermine the autocrat’s support.
Certainly, the Egyptian economy’s pervasive failures are obvious. Per capita gross domestic product is a meager $6,200; one in five people lives below the poverty level.
But this is old news. The real story is that for the past five years, Egypt’s economic development has been on a fast track — with average real GDP growth of more than 6 percent. This compares favorably with the tepid 1.4 percent U.S. rate of recent years