“The Tunisian economy has for decades been held back by the dominance of a rent-seeking economy, which weighs heavily on its development,” highlighted the Tunisian Institute for Strategic Studies (ITES) in a note on “Policies to Combat the Rent Economy in Tunisia.”
According to ITES, over 50% of Tunisia’s economic sectors are subject to access restrictions, preventing new entrants from competing with established players and limiting entrepreneurial dynamism. This leads to an estimated 5% loss in productivity and the non-creation of 50,000 jobs annually.
The institute explains that the rent economy manifests in wealth capture by privileged groups through monopolies, import licenses, targeted subsidies, preferential loans, or complex administrative barriers.
This blocks competition, limits productive investment, stifles innovation, distorts markets, and fuels social inequalities.
Inequalities set to worsen
ITES warns that Tunisia faces growing economic and social inequalities, reduced innovation capacity, declining private investment, greater polarization in the labor market, and persistently low growth. “Rent diverts national wealth toward minority groups at the expense of the majority,” the report states.
To address this, ITES proposes actions to strengthen competition, improve economic governance, protect the middle class, stimulate innovation, and foster sustainable and inclusive growth.
Key recommendations include promoting genuine competition, strengthening
the independence of the Competition Council, reviewing sector regulations to eliminate excessive protections for interest groups and formally banning any exemptions to anti-cartel laws.
The institute also recommends ensuring market contestability, simplifying procedures for concessions and licenses, combating informal barriers (clientelism) via independent audits, facilitating SME and start-up access to finance and introducing transparent criteria for public procurement eligibility.
Combating “opaque tax arrangements”
It is also recommended to eliminate unjustified tax breaks gradually, enhance income and property tax progressivity, centralize and digitize tax data to reduce evasion, establish transparent monitoring systems and combat opaque fiscal privileges.
Furthermore, ITES proposes to reorient investment policy towards value addition, by simplifying and unifying the regulatory framework for investments, refocusing aid and subsidies on sectors with high technological potential and local SMEs, and setting up a single digital portal for all procedures, to accelerate business creation.
It also recommended improving economic governance and transparency, through the establishment of an open data portal bringing together all public information, the regular publication of the beneficiaries of concessions, public contracts…, and the creation of multi-party bodies to monitor reforms.
The effort must also be directed, according to ITES, towards reforming the banking system (increasing transparency on credit granting criteria, establishing specific mechanisms for innovative SMEs to access finance…), administrative reform (reducing physical contact between economic actors and the administration, ensuring the digital archiving and auditability of all economic procedures…), land reform (publishing land prices by geographical area, introducing a differentiated tax on unproductive or speculative land capital gains…), and human capital reform (ensuring transparency in public recruitment, combating market access rents through informal networks…).
Finally, ITES asserts that the fight against the rentier economy “is a major and complex undertaking, requiring coordination between the different components of the State, the private sector, civil society, and international partners,” adding that “success will depend not only on technical reforms, but also on constant and shared political will.”
