Recent decades have witnessed a devolution of policymaking authority in Egypt to particular interest hierarchies, most prominently in areas unrelated to internal security and foreign affairs. One area where the state has relinquished some of its historic decisional and implementation responsibility has been in the area of economic policy where members of the private sector elite have increasingly used their informal relationships with the state to influence government policy. This project seeks to examine the institutionalization of this informal relationship by focusing on the emergence of privatist corporatism in Egypt. According to O'Donnell (1977), privatist corporatism opens certain policy domains to the representation of specific interests of the co-opted sectors. The relationship between the state and the business elite in privatist corporatism is a symbiotic one in which the state enjoys the support of the private sector and depends on business elite to set and implement state policy. Through this mutual dependence, the co-opted businessmen are granted certain rights and privileges and at the same time the state is guaranteed that these businessmen choose not to operate independent of state channels. This project seeks to explain why Egypt witnessed a retreat in the role of the state in setting economic policy in favor of policymaking by co-opted businessmen. In order to answer this question, I use elite interviews with representatives the private sector and state from both the contemporary and historical period. I also examine the archives of Al-Ahram, Al-Akhbar, Al-Ahram Weekly and Al-Masry Al-Youm. Cases considered include a discussion of Ahmed Ezz a steel magnate and a leading member in the ruling party who has pushed through legislation that enhanced his steel monopoly. I also examine the case of Khairat al-Shater - a Muslim Brotherhood leader tried before a military court for money laundering despite the fact that the prosecution lacked evidence for the claim. I argue that businessmen who are part of the privatist corporatist system are able to influence policy making, while businessmen affiliated with the opposition are persecuted by the regime.