Working Paper - 215 - A Regional Budget Development Allocation Formula for Tunisia

Taoufik Rajhi

Working Paper Series from African Development Bank

Abstract: The purpose of this paper is to recommend a new public resource allocation system for the development budget based on a new allocation process, on the one hand, and allocation formulas on the other. The new process and allocation rules include the role of the State in the implementation of a national development strategy as well as that of the various structural disadvantages/marginalization of the different regions. This is why we have developed the development budget allocation formula which is based on five principles: Global coherence, effectiveness, equity, transparency and simplicity. These five principles are crucial to ensuring national cohesion and achieving the objectives of the revolution. In addition, the allocation process is designed around three budget “tranches”. One tranche called Global Coherence, a second called Republican and a third called Convergence. Each tranche has its own rules and objectives. In particular, Convergence allocation between regions takes place according to a distribution formula with the objective of inclusive growth. It is mainly based on a new index of regional development made up of three components; Structural vulnerability, economic vulnerability and the social vulnerability of the different regions.

Date: 2014-12-30
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