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Development policy and regional economic convergence: The case of Tunisia
Author(s) -
Labidi Mohamed Ali
Publication year - 2019
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12206
Subject(s) - convergence (economics) , inefficiency , economics , economic geography , econometrics , development economics , economic growth , microeconomics
Regional disparities continue to be a major concern for the regional policies and regional development of developing countries. Unfinished reforms and the growth of regional disparities imply the need of intervention for economic convergence. Prominent recent studies on economic convergence have mainly focused on the regions of developed countries. This article assesses the speed of economic convergence of the Tunisian economy during the period 1985–2016. The economic performance of a region is influenced by the activities of neighbouring regions. Regional interdependence is determined by a preliminary diagnosis of autocorrelation within the 24 Tunisian spatial units. Spatial autocorrelation is explicitly introduced in the convergence regression of observed growth. This makes it possible to correct the problems resulting from the inefficiency of the estimators and to quantify, according to the model of the correlation detected, the speed of regional economic convergence. Our results suggest that convergence does exist, but at a slow speed. Therefore, appropriate public policies can rapidly change the speed of convergence and enable the least developed territories to catch up economically.