ABSTRACT
The main paradox to be explained in this volume is not why Tunisia has been successful compared to most other MENA countries, but why it has failed to achieve the same success as many East Asian countries despite having followed a very similar path toward long-term development. This chapter identifies these seemingly broad policy similarities, and reviews some explanations offered by other authors for the differential outcomes, but then goes on to identify seven important factors lying behind why Tunisia has not done as well in long-term development as East Asia (China, Indonesia, South Korea, Malaysia, Philippines, Thailand). These are its: (i) lower rates of saving and capital accumulation, (ii) failed land reform, (iii) limited success in stimulating technological progress and transfer, (iv) miss-matching of skills and inefficient allocation of human capital, (v) mixed success in financial development, with limited growth in bank credit to the private sector and weak development of stock markets, (vi) weak fiscal policies, and (vii) insufficient use of global markets, including weak integration into Global Value Chains (GVCs) and limited diversification of exports. In general, although the policy strategies may have been similar, Tunisia's shortcomings are found to lie primarily in both weaker implementation of the policies and insufficient adaptation to changing circumstances.
