Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed B... more Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed Bechri, Tijani Najah and Jeffrey B. Nugent * July 20, 1999 ABSTRACT This paper studies a case of institutional failure in a popular lending program in Tunisia. ...
During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% ... more During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% per year, against 3.5% only, for the MENA region as a whole. However, Tunisia failed to reduce obvious inefficiencies such as high protection, financial repression, and a highly regulated economy in general. The present study attempts to explain why the country was unable to do better in this respect, even though it was a top performer in social modernization and it started its economic reforms relatively early. The study adopts the political economy approach to explain independent Tunisia's development policy choices, based on the theory of collective action and an analysis of contracting problems of representation, coordination, and commitment. The paper draws on some lessons from Tunisia for the other MENA countries. It stresses the importance of women's rights, population control, and modern education. In addition, it refers to the recent examples of Morocco and Kuwait regarding women status reform to argue that action is still possible. It argues that even though no efforts should be spared to get influential groups on board, the reforming governments in MENA today cannot afford to be paralyzed by anti-reform groups-such as Islamist groups in Parliaments-either.
Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed B... more Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed Bechri, Tijani Najah and Jeffrey B. Nugent * July 20, 1999 ABSTRACT This paper studies a case of institutional failure in a popular lending program in Tunisia. ...
This paper studies a case of what in many respects is an institutional failure. It is the popular... more This paper studies a case of what in many respects is an institutional failure. It is the popular lending program in Tunisia known as FOPRODI, created in 1974 for the promotion of small and medium manufacturing enterprises (SMEs) and for the decentralization of industry. FOPRODI's announced aim was to help new entrepreneurs with insufficient capital to start their businesses and thereby to create new jobs. Because of an extremely low repayment rate, the program has failed in the sense that it became unsustainable and indeed finally collapsed in 1997. While there are some bases for believing that FOPRODI may have been more successful than it might seem in social terms, at this point it seems to have been a failure. The sources of its institutional failure are traced to inappropriate incentives attributable both to the institutional structure surrounding FOPRODI and its own rules. The findings are then used to generate policy recommendations on ways in which similar programs could be better designed, transaction costs reduced and the outcomes obtained more satisfactory.
During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% ... more During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% per year, against 3.5% only, for the MENA region as a whole. However, Tunisia failed to reduce obvious inefficiencies such as high protection, financial repression, and a highly regulated economy in general. The present study attempts to explain why the country was unable to do better in this respect, even though it was a top performer in social modernization and it started its economic reforms relatively early. The study adopts the political economy approach to explain independent Tunisia's development policy choices, based on the theory of collective action and an analysis of contracting problems of representation, coordination, and commitment. The paper draws on some lessons from Tunisia for the other MENA countries. It stresses the importance of women's rights, population control, and modern education. In addition, it refers to the recent examples of Morocco and Kuwait regard...
Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed B... more Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed Bechri, Tijani Najah and Jeffrey B. Nugent * July 20, 1999 ABSTRACT This paper studies a case of institutional failure in a popular lending program in Tunisia. ...
During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% ... more During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% per year, against 3.5% only, for the MENA region as a whole. However, Tunisia failed to reduce obvious inefficiencies such as high protection, financial repression, and a highly regulated economy in general. The present study attempts to explain why the country was unable to do better in this respect, even though it was a top performer in social modernization and it started its economic reforms relatively early. The study adopts the political economy approach to explain independent Tunisia's development policy choices, based on the theory of collective action and an analysis of contracting problems of representation, coordination, and commitment. The paper draws on some lessons from Tunisia for the other MENA countries. It stresses the importance of women's rights, population control, and modern education. In addition, it refers to the recent examples of Morocco and Kuwait regarding women status reform to argue that action is still possible. It argues that even though no efforts should be spared to get influential groups on board, the reforming governments in MENA today cannot afford to be paralyzed by anti-reform groups-such as Islamist groups in Parliaments-either.
Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed B... more Page 1. Anatomy of an Institutional Failure: Tunisia's Lending Program to SMEs Mohamed Bechri, Tijani Najah and Jeffrey B. Nugent * July 20, 1999 ABSTRACT This paper studies a case of institutional failure in a popular lending program in Tunisia. ...
This paper studies a case of what in many respects is an institutional failure. It is the popular... more This paper studies a case of what in many respects is an institutional failure. It is the popular lending program in Tunisia known as FOPRODI, created in 1974 for the promotion of small and medium manufacturing enterprises (SMEs) and for the decentralization of industry. FOPRODI's announced aim was to help new entrepreneurs with insufficient capital to start their businesses and thereby to create new jobs. Because of an extremely low repayment rate, the program has failed in the sense that it became unsustainable and indeed finally collapsed in 1997. While there are some bases for believing that FOPRODI may have been more successful than it might seem in social terms, at this point it seems to have been a failure. The sources of its institutional failure are traced to inappropriate incentives attributable both to the institutional structure surrounding FOPRODI and its own rules. The findings are then used to generate policy recommendations on ways in which similar programs could be better designed, transaction costs reduced and the outcomes obtained more satisfactory.
During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% ... more During the last five decades Tunisia managed to achieve a robust long-run GDP growth of about 5% per year, against 3.5% only, for the MENA region as a whole. However, Tunisia failed to reduce obvious inefficiencies such as high protection, financial repression, and a highly regulated economy in general. The present study attempts to explain why the country was unable to do better in this respect, even though it was a top performer in social modernization and it started its economic reforms relatively early. The study adopts the political economy approach to explain independent Tunisia's development policy choices, based on the theory of collective action and an analysis of contracting problems of representation, coordination, and commitment. The paper draws on some lessons from Tunisia for the other MENA countries. It stresses the importance of women's rights, population control, and modern education. In addition, it refers to the recent examples of Morocco and Kuwait regard...
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