What drives Tunisian economic growth: urbanization or rural development?

Abstract

A nation’s economic growth plays a pivotal role in determining its level of national economic integration and participation in global value chains. This research investigates the impact of urbanization and ruralization on economic growth in the case of Tunisia, utilizing annual data spanning from 1965 to 2019. The findings, derived from the estimation of an autoregressive distributed lag model and an error correction model, reveal a negative correlation between urbanization and Tunisian economic growth. Conversely, ruralization is found to have a positive impact, suggesting that Tunisia may not have reached a stage of urban saturation. The study implies that urbanization, without concurrent industrialization, has encountered limitations. Consequently, Tunisia, having developed without due industrial progress, is no longer perceived as a privileged locale but at times faces exclusion. In addressing the urban crisis, ’urban exodus’ becomes, at times, the sole response.

Keywords

• tunisian economic growth
• urbanization
• ruralization
• ardl
• ecm