The 2026 Tunisian Finance Law has been presented as a socially oriented budget, placing particular emphasis on strengthening the state's role in job creation and improving living standards. To this end, it provides for a broad package of recruitment, regularisation, and integration measures. According to the Finance Law, these measures include approximately 51,900 recruitment, integration, and regularisation operations, including more than 22,000 new public sector positions in 2026, alongside additional programmes to support employment and finance economic initiatives.
However, assessing these policies cannot be limited to the number of jobs announced. They must also be examined in light of Tunisia's broader fiscal situation. Under the 2026 Finance Law, state revenues are projected at approximately 52.56 billion Tunisian dinars, while total expenditure is expected to reach 63.58 billion dinars, leaving a financing gap of more than 11 billion dinars. In addition, the government plans to mobilise 27.06 billion dinars in Treasury resources, largely through domestic and external borrowing, to finance the budget deficit and repay public debt principal.
At the same time, the public sector wage bill amounts to approximately 25.3 billion dinars, representing nearly 40% of total government expenditure. This is a high level compared with many middle-income economies and reflects the significant weight that the public sector has come to occupy in Tunisia's public finances. With debt servicing costs, subsidies, and social spending continuing to rise, this reality raises a fundamental question: can Tunisia continue expanding public employment without placing additional pressure on its fiscal balances?
There is broad agreement that reducing unemployment and improving social conditions should remain national priorities. However, economic experience shows that the success of employment policies is not measured by the number of jobs financed by the state, but by the economy's ability to generate productive and sustainable employment. This raises a fundamental question: can the public sector continue to serve as Tunisia's primary employer, or is it time to transition towards an economic model driven by investment, productivity, and the private sector?
The Wage Bill: Has the State-as-Employer Model Reached Its Limits?
The Tunisian government has allocated approximately 25.3 billion dinars to wages in the 2026 budget, representing nearly 40% of total government expenditure and making it the single largest spending category. By comparison, total state revenues amount to only 52.56 billion dinars, while expenditure reaches 63.58 billion dinars, creating a financing gap exceeding 11 billion dinars. In addition, the government must mobilise more than 27 billion dinars to meet Treasury financing needs and repay public debt principal.
These figures reflect the economic model Tunisia has relied upon for decades, in which the state has served as the principal employer and a primary source of income for a large share of the workforce. Over time, this approach has shifted public spending increasingly towards current expenditure at the expense of investment. As a result, a growing share of public resources is devoted to financing wages, debt servicing, and subsidies, leaving less fiscal space for investment in infrastructure, education, healthcare, and scientific research.
Number of public employees in Tunisia, 2010–2026
Central and local government agents, in thousands
Source: National Institute of Statistics (INS), Caractéristiques des agents de la fonction publique et leurs salaires (2010–2021 and 2015–2022 editions); 2026 figure from Ministry of Finance budget documents, cited in Tunisian press (Le Courrier de l'Atlas, March 2026).
Public sector wage bill, Tunisia, 2011–2026
TND billion, nominal, budgeted / executed amounts
Source: Institut Tunisien des Études Stratégiques (2011 and 2017 figures, cited via Tustex); Tunisian Ministry of Finance, Finance Law budget documents 2019–2026 (cited via Tustex, Businessnews.com.tn, Kapitalis, and Ministry of Finance press briefings 2025–2026).
Public sector wage bill as % of GDP, Tunisia, 2017–2026
Share of GDP absorbed by the civil service wage bill
Source: World Bank, Tunisia Public Expenditure Review — A New Pact for the Transition (2020), for 2017; Tunisian Ministry of Finance Finance Law budget documents for 2019 and 2023–2026 (cited via Tustex, Kapitalis, Managers.tn, Espace Manager).
The International Monetary Fund (IMF) has repeatedly warned in its consultations on Tunisia that the continued expansion of the public wage bill constrains fiscal sustainability and reduces the resources available for public investment. It has therefore called for civil service reform and improvements in the efficiency of public spending rather than a continued expansion of public employment. Likewise, the World Bank has emphasised in several reports on Tunisia that improving the quality of public expenditure requires redirecting resources away from current spending and towards investment and structural reforms that enhance productivity and strengthen private sector-led growth.
This does not imply that the size of the public sector is inherently problematic. Every advanced economy relies on a capable and effective public administration. The key difference lies in efficiency and productivity. When a government allocates an increasing share of its resources to maintaining an expanding administrative apparatus, it inevitably has fewer resources available for productive investment, becomes less resilient to economic shocks, and grows more dependent on borrowing to finance its day-to-day operations.
For this reason, the real debate should extend beyond the number of new public sector recruitments announced each year. The more important question is whether these recruitments generate genuine economic value and improve the quality of public services, or whether they simply create permanent fiscal obligations without raising either administrative efficiency or overall economic productivity. Ultimately, the sustainability of public employment depends not on the number of civil servants, but on the economy's capacity to finance them through sustained economic growth rather than through higher borrowing or increased taxation.
Public Employment: Between Economic Necessity and Political Considerations
Public employment policies cannot be separated from their broader economic and social context. In many developing countries, periods of high unemployment and weak private investment often make the public sector the employer of last resort. Governments also face growing social and political pressures that encourage the expansion of public sector recruitment as a means of easing social tensions and responding to rising demands for employment.
The political economy literature has examined this phenomenon for decades, showing that governments may resort to creating public sector jobs when their ability to stimulate private investment is limited or when social pressures intensify. Although such policies can help reduce social tensions in the short term, they do not address the structural causes of unemployment. Instead, they may create permanent fiscal commitments that place an increasing burden on public finances for many years.
Tunisia has experienced this trend to varying degrees, particularly since 2011, when public sector employment expanded at a faster pace than the economy itself. While these recruitments were often intended to respond to legitimate social demands, they also contributed to a growing public wage bill and higher current expenditure, without necessarily producing a corresponding improvement in administrative productivity or the quality of public services.
This does not imply that all public recruitment is unnecessary. Several sectors continue to face genuine staffing shortages, including healthcare, education, the judiciary, security services, and tax administration. However, broad-based recruitment across public institutions, without regular assessments of actual staffing needs or institutional performance, can result in an inefficient allocation of human resources. Consequently, some public bodies may become overstaffed despite generating limited value, while other essential institutions continue to suffer from significant shortages of qualified personnel.
Public employees as a share of total population — international comparison
Government headcount ÷ total population, most recent available year
Author's calculation from official headcounts and national population figures. Tunisia: INS (2026, 687,000 agents); Morocco: Ministry of Economy and Finance, Human Resources Report accompanying PLF 2025 (2024, 15.3 agents per 1,000 inhabitants); Algeria: Algerian public service directorate figures, cited via Algeria-Watch and Wikipedia (end-2022, 2.8 million agents); France: INSEE, L'emploi dans la fonction publique en 2024 (5.9 million agents). Definitions of "public employee" vary across countries (inclusion of state-owned enterprises, local government, etc.), so this comparison should be read as indicative rather than strictly harmonised — see the World Bank's Worldwide Bureaucracy Indicators methodology notes.
Public sector wage bill as % of GDP — international comparison
Most recent available year
Source: Tunisia — Tunisian Ministry of Finance, Finance Law 2026 budget documents (13.4% of GDP); Morocco — Human Resources Report accompanying PLF 2025 (10.8% of GDP, 2024); France — FIPECO, Le niveau et l'évolution de la masse salariale publique (2024, 12.4% of GDP including employer social contributions).
Public sector wage bill as % of total public expenditure — international comparison
Most recent available year
Source: Tunisia — Tunisian Ministry of Finance, Finance Law 2026 (≈ 40% of total budget expenditure); Morocco — Human Resources Report accompanying PLF 2025 (32.4% of the general state budget, 2024); France — FIPECO (2024, 21.7% of public expenditure including employer contributions).
For this reason, both the World Bank and the International Monetary Fund (IMF) have consistently argued that civil service reform is not simply about reducing the number of public employees. Rather, it aims to improve the efficiency of public administration, align recruitment with the genuine needs of public services, and increase the productivity of public spending. Ultimately, the effectiveness of a public administration should be measured not by the size of its workforce, but by the quality of the services it delivers and its contribution to supporting sustainable economic development.
From Public Recruitment to Structural Reforms
Expanding public sector recruitment may help ease social pressures in the short term, but it cannot provide a lasting solution to unemployment unless it is accompanied by deeper economic reforms. Every new position created in the civil service represents a permanent commitment for the state budget, whereas wealth creation ultimately depends on the economy's ability to attract investment, improve productivity, and expand exports.
For this reason, the success of the Finance Law should not be measured solely by the number of public sector recruitments it authorises, but also by its contribution to creating the conditions that enable the private sector to expand and generate employment. This includes improving the business environment, simplifying administrative procedures, strengthening competition, accelerating the digitalisation of public administration, and reforming state-owned enterprises that continue to place a growing burden on public finances. Although these reforms are often more politically challenging, they remain the most effective way to create sustainable employment and raise long-term economic growth.
Conclusion
There is no dispute over the importance of preserving the state's social role or protecting the most vulnerable groups. However, economic policy cannot rely indefinitely on expanding current expenditure and public sector employment. Public financial resources remain limited, while financing needs, the public wage bill, and debt servicing costs continue to rise, leaving less fiscal space for investment in the sectors most capable of raising productivity and supporting long-term growth.
From this perspective, the real challenge facing Tunisia is not the number of recruitments included in the 2026 Finance Law, but the country's ability to gradually transition from an economic model in which the state serves as the principal employer to one driven by investment, production, and private sector activity. Public employment should remain focused on meeting the genuine staffing needs of essential public services, while the creation of sustainable jobs increasingly becomes the responsibility of a more competitive, dynamic, and open economy. Only then will Tunisia be able to reconcile social justice with fiscal sustainability and achieve the sustained economic growth needed to provide employment opportunities for future generations.