The Tunisian Path to Development : 1961-2001

In this report we propose to study the Tunisian path to economic development in four stages. First, we trace the history of economic development in Tunisia over the period 1961-2001, describing the different economic policies that were adopted and their consequences on factor accumulation and well being. We distinguish three phases of economic development: the socialist period from 1961 to 1970, the mixed economy period from 1971 to 1986, and the structural adjustment period from 1987 to 2001. We then proceed to a quantitative analysis of Tunisia's potential performance in a competitive setting and an open economy. The activity analysis confirms the reversals of economic efficiency and growth performances described in the historical perspective. It quantifies the potential level of domestic final demand that Tunisia could have reached had it from the start followed the path of perfect competition and free trade. It also determines Tunisia's sectors of comparative advantage and the sources of evolution of its growth performance. After that, we evaluate the records of social and economic achievements in Tunisia over these four decades, focusing especially on the poverty record and presenting the policy measures that were undertaken to combat poverty. And finally, we discuss the style of governance that has guided Tunisia since its independence, the institutional setup, and some of the political economy reasons for Tunisia's overall success in development