Studies on Growth with Equity: Tunisia

Studies on Growth with Equity - Tunisia: A New Social Contract for Fair and Equitable Growth

Tunisia, the country at the forefront of the “Arab Spring”, is a stark example of the fragility of an economic system based on an inefficient growth model. In spite of the country’s strong growth and apparently stable macroeconomic environment,the benefits of growth were unevenly distributed. There was widespread inequality, high unemployment, rampant clientelism, and limited opportunities for decent work. The events have opened a window of opportunity by creating space for a policy debate on building an inclusive model of development. The purpose of this Report is, first, to provide an in-depth analysis of the contradictions that characterized inequitable growth. Second, the Report puts forward ideas for a new development model for Tunisia, based on equal economic and social opportunities, and therefore shared prosperity.

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It is often argued that the cost of social equity is less economic growth, highlighting the supposed trade-off between these two goals. The crisis that erupted in 2008, which was preceded by rising social inequalities, has shown that this is simply not the case. In fact, if properly designed, equity-enhancing policies can also promote prosperity and reduce the risk of future crises. The aim of the "Studies on Growth with Equity" is to show how such policy complementarities can be achieved.

The Tunisian revolution of January 14, 2011 provides a stark example of the limits of economic growth without social justice. The country’s strong growth performance and stable macroeconomic environment covered deeply-rooted structural imbalances such as widespread inequality, high unemployment, and limited opportunities to obtain decent work. This study puts forth a strategy to develop a more inclusive model of growth that centres on stronger quality job creation especially for young people, improved governance and transparency, and greater social dialogue in order to achieve a more socially and economically sustainable growth.