Investments, Employment, and Output per Man in the Tunisian Economy, 1961-1971

Abstract

An analysis of the overall performance of the Tunisian economy between 1962 and 1971, the period of the Ten Year Perspective Plan. In the process of the analysis, certain problems of measurement and the solutions adopted are discussed in detail. The manufacturing sector is singled out for special emphasis. Three measures are developed for the analysis: capital-output ratios, capital-labor ratios, and out-labor ratios. These measures are calculated on a disaggregated basis. The major findings are that, though by international standards the performance of the Tunisian economy was very good, the heavy investments concentrated in relatively few industries did not produce commensurate results. The detailed analysis showed that particularly in the public sectors, investments produced insufficient output, were very capital-intensive, and yet produced inadequate output per man. In explanation, a series of policy problems is discussed, including most importantly, the institutional problems of making execution of policy decisions more responsive to the decision of the policy makers.