ABSTRACT
This chapter identifies seven different broadly defined factors which seem to have contributed to Tunisia's comparative success, through 2010, among MENA countries both in reducing its poverty rates and in achieving relatively high real per capita GDP growth rates. Four of these factors relate to standard economic policies which have been found critical for success: (i) a stable macroeconomic environment with limited distortions, in terms of inflation, exchange rates, interest rates, and wage policy, (ii) high levels of investments in human capital, equity and equality of opportunity, especially in education and health, (iii) high levels of investments in infrastructure and (iv) extensive leveraging of global markets and integration into the global economy, through expansion of exports and attracting FDI. Very significantly, however, the chapter also calls attention to three other factors contributing to broad-based institutional capabilities, namely (i) leadership endowed with a consistent and broadly shared vision, a committed and capable government, and ever-strengthening state capacity, (ii) adaptive but broadly predictable policies that make use of both market and non-market mechanisms to allocate resources, and (iii) relatively strong property rights, state capacity and commitment to gender equity. These factors did not favor Tunisia compared to the six East Asian comparators (China, Indonesia, South Korea, Malaysia, Philippines, Thailand).
