Subsidization Policies in Egypt: Neither Economic Growth nor Distribution

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Abstract
Subsidies are a widespread economic practice in most developing countries and in centrally planned economies such as those of Eastern Europe. In the United States and Western Europe, they are generally associated with price support for producers, especially in agriculture. In the less-developed countries (LDCs), subsidies usually support consumers. When extended to producers, the benefit is passed on to consumers through official price controls. The question is whether such price support is the best means available to meet the basic needs strategy of development.Subsidies in LDCs often begin as measures to help the poor, but they usually expand beyond the target population and constitute by and large a wage supplement for almost all salaried workers.

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