ABSTRACT
This chapter identifies the factors found to play the most important roles in explaining variations in Tunisia's economic performance over the 1956–2010 period. These include favorable initial conditions, including (i) its favorable heritage in terms of state capacity, (ii) a homogenous population, (iii) a favorable geographic location, and (iv) the emergence of a strong and charismatic leader in Habib Bourguiba. Yet, despite these favorable initial conditions, since Tunisia has had to face major economic challenges over the years since independence, it has had to adopt some different but important strategies for dealing with these challenges. The chapter identifies the different economic strategies and their evolution over time, i.e., moving from predominance of the private sector during its early independence years (1956–1961), to ‘socialist’ and state-led development planning (1961–1969), to private sector-oriented and export-led development (1970–1986), structural adjustment (1986–1995), and greater integration into the global economy starting with the Barcelona Process (1995–2010). While in some ways, these strategies and policies can be traced back to favorable initial conditions, in other ways it is the challenges and changing policy strategies for dealing with them that have led Tunisia to adopting more appropriate institutions and adjusting its policies to changing circumstances.
