Summary :
Abstract
Official estimates of income inequality in Egypt, derived from household surveys, are few and dispersed, but report consistently low/falling inequality in recent decades. This contradicts the popular perception of rising inequality that has arguably fuelled the Arab Spring. This discrepancy has been termed the ’Arab inequality puzzle’ in recent literature.
This paper revisits the paradox by measuring regional economic inequality across Egyptian provinces from 1992 to 2022, using provincial real output per capita. It shows that regional inequality in Egypt has been high, and has risen since the mid-1990s. The paper provides evidence that a decline that occurred in recent years, was driven by shocks, most notably, the structural adjustment program launched in 2016. This decline has been short-lived and resulted from a short-term fall in output per capita in wealthier provinces, rather than accelerated growth and convergence of poorer ones. Given that poverty and wealth are often spatially concentrated, the study argues that regional economic inequality, while distinct from personal income inequality, can serve as a meaningful proxy for broader inequality dynamics in Egypt.