Struggles over austerity: The implementation of contested IMF reforms in Egypt and Tunisia from a comparative political economy perspective

Since mass uprisings toppled long-standing dictators in 2011, Egypt and Tunisia have embarked on dramatically different political trajectories, but have continued to face quite similar economic problems. In 2016, governments in both countries entered into loan agreements with the IMF, promising austerity measures such as the reduction of subsidies and public sector expenses. After or close to completion of the programs, the IMF’s evaluation of the country programs suggests a successful implementation in Egypt, which contrasts with a rather negative assessment for Tunisia. At first glance, these diverging outcomes could be attributed to the different political regimes: While the extremely repressive authoritarian regime under Abdel Fattah al-Sisi simply had the power to push through unpopular reforms, governments in Tunisia’s fragile democratic regime failed to do so in the face of popular discontent. In this paper, we take issue with this simplistic view. Drawing on comparative studies on the political economy of structural adjustment reforms and the experiences of Latin American countries in the 1980s in particular, we argue that regime type surely matters but that the contentious politics of IMF reforms are much more complex, even in authoritarian Egypt. Reform struggles in both countries are shaped by more specific factors and dynamics, including the evolving power relations between different social and political actors as well as broader discourses on the role of the state and ideas of social justice that significantly shape welfare state reforms well beyond external actors’ agendas.