4 - Economic Crisis, Informal Institutions, and the Transformation of Islamist Politics in Egypt

Summary

In Egypt, by the mid-1980s, as a result of a deep economic crisis, thousands of Islamic voluntary associations managed to develop a parallel economy and a parallel welfare system. In some instances, these modes of informal organizations translated into an Islamist-inspired challenge to the state. The rise in political influence of the Islamic Investment Houses dominated by the Muslim Brotherhood aided that organization in its recruitment programs that expanded its membership. Moreover, where radical Islamic groups were able to exploit informal financial networks and procure informal labor contracts for their supporters, particularly in the informal settlements around Cairo, they used these as bases of power and influence. Using private sources to establish social networks in defiance of state regulations, organizations such as the militant Islamic Group (al-jama’at al-Islamiyya) have sought to build, literally, a “state within a state.”