ABSTRACT
Whatever the ultimate outcome of the 'Midan al Tahrir Uprising' of early 2011, governance will continue to assume steadily greater importance for Egyptian economics and politics. Although the temporarily ascendant military may seek to slow the pace of Egypt's economic globalization, economic nationalism is not the answer to the country's development problems. Egypt will have to attract more foreign investment and become much more integrated into global production chains if rates of job creation and income growth are to accelerate. Foreign direct investment (FDI), especially by multi-national corporations that provide access to the technology essential to climbing up production ladders, depends ever more heavily on actual governance performance, as well as on perceptions of that performance by potential investors. The three most important issues in the measurement of governance are the degree of homogeneity of indices, the use of perceptual as opposed to empirical data, and reliance upon the formal, legal and official, as opposed to the informal—the actual practice.
