Book Review: Tunisia’s Economic Development: Why Better than Most of the Middle East but Not East Asia

Few countries in the Middle East and North Africa pose a development puzzle as instructive as Tunisia. For decades, it appeared to be one of the region’s most credible non-oil success stories: outward-oriented, socially progressive, relatively stable, and meaningfully ahead of many peers on indicators of education, health, and poverty reduction. Yet the same country that outperformed much of MENA never came close to reproducing the transformative growth achieved by East Asian economies of comparable starting conditions. More paradoxically still, the democratic breakthrough of 2011—long imagined as the missing ingredient—coincided not with economic renewal, but with stagnation, institutional erosion, and deepening public disillusionment. Mustapha K Nabli and Jeffrey B Nugent’s Tunisia’s Economic Development: Why Better than Most of the Middle East but Not East Asia offers the most rigorous and comprehensive account of this paradox yet produced, and, in doing so, raises questions that extend well beyond any single country.

The authors bring formidable credentials to the task. Nabli has served as Professor of Economics at the University of Tunis, Minister of Planning and Economic Development, Chief Economist for the MENA Region at the World Bank, and Governor of the Central Bank of Tunisia. Nugent, a Professor at the University of Southern California, has conducted extensive research across both regions for the United Nations, the World Bank, and the International Monetary Fund. Together, they bring to the subject a combination of insider knowledge and comparative discipline that is rarely achieved in a single volume. The result, published in the Routledge Political Economy of the Middle East and North Africa Series, covers the period from independence in 1956 through the eve of the COVID-19 pandemic. It is not a triumphalist account of Tunisian achievement, nor a simple post-mortem. It is something more demanding: a sustained inquiry into why a country that did so much right could never do enough, deeply enough, to break through.

The book’s comparative architecture is one of its most important methodological choices. Tunisia is assessed against a broad sample of MENA countries and against six East Asian economies—China, Indonesia, South Korea, Malaysia, the Philippines, and Thailand—deliberately chosen to include both ‘miracle’ performers and less successful peers. Spanning roughly 1960 to 2020, this dual comparison prevents the analysis from becoming either self-referentially regional or falsely satisfied with incremental gains. The authors draw on more than 60 years of original data—covering growth, human development, poverty, inequality, productivity, savings, investment, finance, trade, enterprise conditions, and institutional quality. The two comparisons produce very different stories, and understanding why requires confronting the full complexity of each.

The book is persuasive, and generous, in explaining Tunisia’s relative success within MENA. The authors credit sustained investment in human capital, macroeconomic stability, infrastructure development, pragmatic and adaptive policymaking, and a genuine—if incomplete—outward orientation in trade and investment. Tunisia’s progress in life expectancy, child mortality, education, and poverty reduction was real and historically significant, particularly set against the record of economies hampered by resource dependence, conflict, or political fragmentation. The book therefore does not traffic in easy condescension towards Tunisian policymakers. It acknowledges the considerable developmental capacity that the state built and deployed, especially in the decades immediately following independence.

Yet the book’s most important contribution lies in its account of Tunisia’s limits, and here it reaches a conclusion that is both elegant and disquieting: Tunisia’s failure was not the absence of development policy, but the insufficient depth, competitiveness, and adaptiveness of a development model that approached transformation without achieving it. Compared with East Asia, Tunisia did not mobilize sufficiently high savings rates—its gross savings ratio fell some 22 percentage points behind the East Asian average by the 2010s, having been at parity as recently as the 1970s. It did not generate comparable productivity growth; total factor productivity, ahead of the East Asian average in the 1960s and 1970s, fell well behind from 2000 onward. It did not build the same mechanisms of technological learning or expose domestic firms to equivalent competitive discipline. Human capital expanded, but persistently failed to translate into employment, innovation, or productivity gains. Unemployment averaged above 15%, even as female labour force participation remained less than half the East Asian level. The gap, in other words, was not one of effort or intent. It was a gap of structural depth that no single policy failure can adequately explain.

Chapter 6, on the political economy of the state-market balance, is among the strongest in the book. The authors show how Tunisia’s state-led model gradually shifted from a source of developmental capacity to a source of developmental constraint. Public-sector dominance in banking, regulatory complexity, barriers to entry, and bureaucratic discretion collectively suppressed private investment, innovation, and productivity. A large informal sector—made rational by the high costs of formality—added further distortionary pressure on firms that chose to comply. Managers of private firms, enterprise surveys show, spent unreasonably large proportions of their time navigating government regulation rather than growing their businesses. The value of this analysis lies in its precision. Rather than stopping at generic calls for ‘reform’, the authors show how Tunisia’s particular configuration of state-market relations produced identifiable pathologies at the firm level—pathologies that persisted even as successive governments announced liberalizing intentions.

The treatment of the post-2011 period is equally important, and similarly unsentimental. Nabli and Nugent are careful not to dismiss Tunisia’s democratic gains—by 2014, its Polity IV score had risen from 1 to 7, placing it above every other country in the region and among the higher scorers globally. But they demonstrate, through a comparison of World Bank enterprise surveys from 2013 and 2020, that political liberalization did not translate into economic renewal. Every one of the 16 measured obstacles to private business grew more severe in that window. Access to electricity, transportation, and land more than tripled in their severity scores. Product innovation and research-and-development spending declined by more than 50%. The proportion of firms submitting to external audit fell from over 78% to approximately 30%. The democratic transition, in short, created possibilities for accountability that were not, in practice, realized. As the authors argue, democracy can reshape the political conditions for development. It cannot, by itself, resolve the deeper institutional, financial, and competitive deficiencies that sustained growth requires.

The book’s conclusions advance three hypotheses to explain the gap at the deepest level: the eventual disappearance of political leadership capable of credibly orienting long-run expectations towards growth; the entrenchment of special interests and political inertia that resisted the adaptive reforms necessary to escape the middle-income trap; and a ‘neighbourhood effect’ that denied Tunisia the productive complementarities with adjacent economies that proved important to several East Asian success stories. These hypotheses are persuasive and well-grounded in the preceding analysis. The authors acknowledge candidly that these hypotheses have not been formally quantified; establishing their relative weight remains a task for future research. This candour, rather than weakening the book, strengthens its intellectual credibility.

Some limitations deserve acknowledgement. The volume’s empirical richness—its great strength—is also, at points, a source of narrative diffusion. The book’s 60-plus original data tables demand considerable patience, and a more disciplined editorial hand might have sharpened the analytical thread without sacrificing the evidential depth. The three concluding hypotheses, as noted, remain interpretive rather than formally tested, which leaves certain causal questions open. Finally, the book’s empirical window largely closes before the consolidation of presidential authority under Kais Saied after 2021. Tunisia’s subsequent political trajectory has shifted substantially enough that the conclusions now require extension.

None of this diminishes the achievement. Tunisia’s Economic Development is a landmark contribution to the study of MENA political economy and comparative development. Its central lesson is both elegant and sobering: Tunisia did many things right, but not deeply enough, competitively enough, or adaptively enough to converge with East Asia. For scholars of development economics, comparative politics, and Middle Eastern and North African studies, it is essential reading. More than a study of Tunisia, it is a sustained and carefully evidenced reflection on why partial development successes so often fail to become sustained economic transformations—a question that carries implications far beyond the Maghreb.