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Saturday, 19 September 2009

What can Tunisia teach Zambia?

Tunisia’s recent growth and development performance relative to other Arab and African countries has been exceptional. A recent paper draws three broad lessons from Tunisia's development strategy for developing nations such as ours :

  1. The first lesson and perhaps easiest to replicate is Tunisia’s success in reducing fertility rates and enforcing family planning, which is particularly relevant for countries that have high population growth such as Arab and African countries. Lower fertility rates alone will not necessarily lead to higher growth and development. As argued in this paper, Tunisia invested significantly in education and health. This in turn, enhanced productivity and female participation in the labour force, resulting in better and greater human capital. The development effects from reduced fertility can be quite significant. Yet, political factors and the associated institutional arrangements can be crucial to the behaviour and effects of fertility. Indeed, Feng, Kugler and Zak (2000) show that political factors have a significant effect on fertility decisions and that ‘a one-time disturbance compounds across generations, impacting a country's entire development trajectory’.

  2. The second lesson is that social policy reforms can significantly aid economic reforms. Tunisia’s social policy was quite progressive and contributed significantly to enhancing initial conditions, particularly with regard to the welfare and role of women.

  3. The third lesson concerns the role of political stability. It is important to note that Tunisia is not very strong in terms of democratic institutions(political institutional quality) but has, in general, been politically stable. To some extent (in addition to the politics of co-optation and neutralization of major interest groups) this stability enhanced the perception of government credibility and commitment and facilitated coordination, which in turn helped put in place the necessary reforms with generally little confrontation.
Thus, Tunisia’s path to development may provide useful lessons to replicate in other regions, as long as countries have macroeconomic and political stability, relatively good governance, and the political will to reduce inequality and enhance human capital.
The fertility argument is unconvincing due to theoretical and "causal problems", but the importance of "women empowerment" is something not to be dismissed, as previously discussed here, here, here and here. This Tunisia post concludes the series on "success stories". Previous entries include Mauritius, Botswana and Vietnam.

All of these examples underline one important lesson : there's no one size fits all. Each nation must find its own path as it negotiates the historic and political contours. Be sceptical when someone tells you to follow Mauritius or Korea or Botswana. Each country has its own unique challenges forged through history. It is left to the Zambian analysts to study the specific features of our nation and experiment to see what works and might not work. The World Bank and IMF will not provide the answers because they work with generalisations. Only Zambian analysts who understand the culture and history can generate sustainable growth solutions. This is not easy. It requires two things. First, better appreciation for home grown solutions by policy makers. Secondly, greater effort by Zambian analysts to fully grasp the necessary incremental changes. Its hard work, but its the only path to lasting solutions.

The rallying call is clear : Stop importing ideas! Start thinking!

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