This paper aims at finding and analyzing the key determinants of Egypt's fiscal deficits for the period of 1985-2013. It hypothesizes that the political and institutional factors are more important than macroeconomic variables to explain the fiscal deficits of the country in question. In carrying out the research, the paper employs ARDL technique. Findings of the study include that the growth in interest payments, public wages, and subsidy bills are the key sources of fiscal deficits in Egypt. They separately outweigh most of the gains with tax revenues. The reason for this kind of results is found to be largely due to adverse political and institutional factors prevailing in the country. In order to estimate the individual influences of the factors, we use Variance Decomposition Method. Policy implications of the research suggest that to control the future risks of fiscal deficits in Egypt, it is necessary to restrict the growth of subsidy bill and interest payments. However, more efforts are needed to reform the entire tax revenue system and its collection procedures. In addition, policy makers should adopt massive and appropriate political and institutional reform measures.JEL Classifications: H10, H20, H60, H62, C22, C50, K19, K42

Although the key issue in the WTO negotiations on agriculture is subsidies reduction, the EU and USA still account more than 85% of the world agriculture subsidies. An important policy question confronting developing countries is whether the reduction agreed within the Hong Kong conference could enable them to reap significant trade gains. Using data for 19 developing countries from 1995 to 2005, the results of cointegration and ECM indicate that 1% reduction in the subsidies imposed by the EU and USA would raise the developing countries' share in the world agricultural exports by an amount averaged between 0.11% to 0.55%. Simulation results confirm that real gains would be when there is a deep reduction in the current ceiling on overall trade-distorting subsidies by more than 75% for USA and 80% for the EU. The major challenge in coming negotiations is to address the ambiguity in the definition and quantification of agricultural subsidies.