Fiscal Reform for a Strong Tunisia: Short Term Technical Assistance Consultant’s Report

The report aims to take stock of the plethora of Special Funds in Tunisia and propose a methodology for measuring their impact on contributors and beneficiaries. The report's purpose is to assess the situation of the many Special Funds that exist in Tunisia, with a focus on identifying the impact of a selected number of funds. The team produced two documents: a note describing the situation of the Special Funds and a simple econometric methodology based on difference-in-differences (DID) methods. This approach is borrowed from the impact evaluation literature and is described in a separate document included as an appendix. Not all Tunisian Special Funds are amenable to evaluation using counterfactual-based evaluation methods, as some variation over treated firms or individuals is needed to identify their impact on various outcomes. However, using such methods is a key ingredient in assessing whether to retain or eliminate these funds. The proposed methodology is expected to contribute to streamlining the fiscal process in Tunisia. A relative lack of capacity to undertake the proposed impact evaluation methodology was encountered, particularly in Tunisian line ministries, including finance. However, there is a great willingness to learn, which augurs well for the near future. The report highlights the need for technical capacity in implementing the proposed methodology, and a proposal for short-run follow-up is recommended. The expected follow-on activities and next steps include setting up a sequence of training sessions with the appropriate ministries to ensure they have the technical capacity to implement the proposed statistical methodology. The short- to medium-term goal is for the ministries to be able to implement the methodology themselves, using in-house resources, and without the need for external technical assistance.