State Ownership and the Problem of the Work Incentive: An Egyptian Case Study

Abstract

Research on the labour process has recently been extended to include studies of state socialist enterprises. One of the most innovative streams has been based on Hungarian experience. So far little empirical research has been carried out on the `foot-prints' of East European practice left by advisers in developing countries. A case study of a large Egyptian state textile enterprise is presented which suggests that many of the rigidities of traditional state socialism identified by Kornai are faithfully replicated. However, instead of `to each according to contribution' the overriding principle for pay is `to each according to age'. With a buoyant external labour market for manual workers and limited scope for officially personalising rewards, managers introduce flexibility by tolerating various forms of work avoidance and indiscipline. Workers use `effort saved' to take a second outside job.