Budget politics and democratization in Tunisia: The loss of consensus and the erosion of trust

ABSTRACT

Many have attributed the stalled democratization process in Tunisia to consensus politics that failed to bring about significant reforms capable of improving the socioeconomic situation for the majority of Tunisians. This article takes budget politics as a crucial example of a policy area in which decisions made on an annual basis ended up leading to massive public contention in January 2018 and 2019. Studying budget politics in the context of democratization – as a period with a particularly high need for trust – shows that, beyond their material shortcomings, the institutional-procedural failures of economic policies also damaged positive expectations regarding the new political institutions. The article compares different stages of the budget cycle during two consecutive years that saw massive contention surrounding the respective finance laws. A systematic press and document analysis, including of parliamentary minutes and social media posts, reveals a lack of transparency and participation in the budget process and, more importantly, an absence of political responsiveness and reliability vis-à-vis organized business, labor and social movements. Arguing against the idea that “too much” consensus was the root of problems at the time, this analysis shows that the erosion of trust was instead caused by untransparent, ad-hoc, volatile and arbitrary decision-making.

Keywords:

• Democratization
• political economy
• political institutions
• protest
• state corporatism
• trust

Introduction

For years, many analysts believed that consensus politics – defined as cooperation among political adversaries – were behind the success of Tunisia’s political transition. Specifically, scholars and politicians outside of Tunisia took cooperation between the anti-Islamist party Nidaa Tounis and the Islamist party al-Nahda starting in 2014 as proof that polarization between secular and Islamist forces could be overcome, and that it did not need to end in a military coup as occurred in Egypt in 2013. Yet, as early as 2015, Nadia Marzouki was already speaking of a ‘rotten compromise’ and pointing to the danger of parties losing ideological clarity as well as the support of party members (Marzouki 2015). Grewal and Hamdi also highlighted the ‘dark side of consensus’ in several regards, such as the postponement of security sector and economic reforms, which led to growing frustration among the general populace, particularly in the face of the socioeconomic situation (Grewal & Hamid, 2020). Rivera-Escartin (2022) shows how the mismatch in the consensus model at the polity level and a lack of consensus in politics impeded reforms that would have otherwise consolidated Tunisia’s democratic system – ultimately paving the way for President Saied’s power grab on 25 July 2021.

While major reforms were indeed not initiated, political decisions (including controversial ones addressing the socioeconomic realm) had to be made, especially once the new political system was in place and the fiscal context was tightening (see section 2). I argue that studying these conflicts from a political economy perspective can enrich our understanding of Tunisia’s stalled democratization. The article takes budget politics as a crucial example of a policy area in which decisions made on an annual basis ended up leading to massive public contention in January 2018 and 2019.

As conflict over policies themselves is not necessarily a sign of a political crisis, I untangle controversies regarding policy-related issues from those regarding political institutions and procedures. Based on this, the article proposes that trust and the loss thereof can serve as an entry point for understanding the crisis of Tunisia’s democratization process – rather than focusing solely on consensus – or its absence.

Trust is commonly understood as ‘the expectation that others will contribute to the well-being of a person or a group, or at least will refrain from harmful actions’ (Freitag & Traunmüller, 2009 782, following Offe, 1999). Due to high levels of uncertainty, trust during times of political transformation is particularly critical. Most literature on democratization argues that the trust citizens hold in their political institutions as well as interpersonal trust among elites strengthen democracies (Diamond, 1999; Linz & Stepan, 1996). I argue that a more dynamic view of trust in periods of political transformation is needed, one that understands trust as a result of experiences and learning processes.¹ As democratization processes themselves are non-linear and open-ended, different forms of trust can grow or wane. Past research on Tunisia’s transition phase between 2011 and 2014 has investigated successful trust-building among elites (Stepan, 2018, Hassan et al. 2020), while the Arab Barometer identified a general decrease in political trust towards the government (from 62 per cent in 2011 to 20 per cent in 2018) and parliament (from 31 per cent in 2013 to 13 per cent in 2018).²

In my comparative study of two budget cycles – and building on existing research about comparative budgeting (see section 1) – I consider a more complex set of relations among political actors and institutions along with their relation to social stakeholders and movements. I operationalize the aforementioned understanding of trust by analysing the expectations towards government and parliament as they evolve in the conflicts over budget politics. More specifically, I investigate how and why expectations that political institutions would contribute to improving the well-being of a specific group or the Tunisian population as a whole were damaged or even abandoned.

I show how trust in government and parliament was shattered at the different phases of the budget cycle due to limited participation and transparency, low degrees of political responsiveness, erratic and ad-hoc decisions-making and unreliable government decisions. In short: Trust did not erode due to too much consensus (or a lack thereof) but rather on account of the way that conflicts were handled by the government and parliament.³ While it is beyond the scope of this article to explain why political actors behaved the way they did, the analysis shows why their actions were so detrimental to trust relations. Formal and informal institutional procedures remained fluid and changed from one year to another, making trust in political actors more important – and perceptions that trust was breached even more harmful. At the same time, while expectations of being closely included in the budget process held by certain social actors (inherited from their position in the political economy of the Ben Ali regime) was not explicitly questioned by anyone, neglecting these actors or even breaking agreements with them proved particularly disastrous to trust relations.

Methodologically, the argument I present here is based on explaining-outcome process-tracing (Beach & Pedersen, 2013, pp. 18–21). As the relation between budget politics and democratization remains understudied (see section 1) and existing accounts of post-2014 politics in Tunisia do not reflect empirical observations, I opt for the inductive path that Beach and Pedersen describe as ‘more analogous with historical methodology or classic detective work’ (Beach & Pedersen, 2013, p. 20). In my analysis of two consecutive budget cycles, I triangulate four types of data: 1) press reports on the finance laws available at turess.com, a media platform that contains an archive of all major print and online publications in Tunisia,⁴ 2) parliamentary minutes from the general debates about the finance laws, 3) publications and statements made by social stakeholders and publications referred to in press reports and 4) Facebook posts from the official site of the movement for analysing the ‘Fech Nestanaou’ campaign movement that heavily relied on social media in its communication.

I conduct a qualitative content analysis (Mayring, 2022) of these documents, considering the categories of the involved actors, their actions and interactions as well as their perceptions of the drafting, the ratification and the implementation of the respective finance law – both in regard to content and the procedural dimension. Bringing together the different perspectives of the actors involved as well as external observers for each phase of the process in ‘careful descriptions’ (Collier, 2011, p. 823), I identify what caused perceptions of betrayal in different relations at specific moments and over time.

The article starts with a review of the literature on budget politics, specifically focusing on the context of democratization. The second section provides a brief overview of Tunisia’s political economy before and after 2011. This is followed by an analysis of budget conflicts that compares the phases of negotiation (section 3), formal decision-making in parliament (section 4) and early execution as well as public contention towards the respective finance laws (section 5). I conclude with a summary of findings and how they can enrich our understanding of budget politics in the context of democratization.

1. Budget politics and democratization: Lessons from comparative research

Political economy research in contexts of democratization is rather sparse (Eibl & Lynge-Mangueira, 2017), and even more so in the sub-field of budget politics. One key question that emerges from these contexts relates to the effects of democratization on the outcomes of budgetary processes. Baumgartner et al. (2017) find that ‘[a]s governments transition toward greater freedom, their budgetary processes gain stability. Gains in informational capacity provided for by democratic structures seem clearly to outweigh any institutional efficiency afforded by authoritarian government’ (2017: 804). However, as democratization today is mostly unfolding in countries across the Global South – the majority of which are lower-income economies – this process is often accompanied by comparatively scarce state resources. Guess and Savage find that lower-income countries ‘need frequently to revisit or revise previously made budget decisions during the course of a single fiscal year’ (Guess & Savage, 2021, p. 3) – an argument one can also apply to middle-income countries facing financial crises, such as Tunisia. This finding points to the need for gaining a better understanding of how the recurrent imperative to renegotiate the distribution of resources affects the democratization process.

A closer consideration of the matter of institutions shows that the norms generally associated with budget politics in democracies include transparency, accountability, and participation in budgetary processes. While one may expect democratization to foster these norms, a great deal of variation exists across regime types in terms of how budget politics are managed – with participation and transparency also varying widely across established democracies (de Renzio & Kroth, 2011, p. 2). International NGOs have assessed Tunisia as being below the global average in terms of transparency, but slightly above global levels in terms of public participation. These surveys identify limited oversight by parliament, as well as low levels of auditing oversight (Boustany et al., 2021; Open Budget Survey, 2019). While such mid-range scores do not, as such, explain the outrage that the budget laws generated in Tunisia, adding a temporal dynamic proves useful: while Tunisia saw transparency increase in the first years following the revolution, the implementation of new norms was volatile and even recessed at times. Attempts to increase transparency and participation within a new organic budget law and to empower parliament vis-à-vis the government were criticized as insufficient by experts from the Observatoire Tunisien de l’Economie (2018). These changing assessments are very much in line with a non-linear understanding of democratization, showing that implementation of institutional norms, including in the realm of budget-making, remain fluid for some time and can become contested. Failing to resolve such conflicts can very well have a negative effect on the democratization process as a whole.

Informal procedures likewise matter, including trade-offs (Adolph et al., 2020) and ad-hoc institutional solutions to budget conflicts (Guess & LeLoup, 2010, p. 22). Based on case studies from Latin American, Hallerberg et al. (2009) have shown that ‘[f]iscal outcomes are not necessarily the product of decisions made by technocrats acting solely in the fiscal arena, but the result of a complex web of interactions among government officials, legislators, economic actors and civil society’ (2009, 7–8). As such, different factions within the executive branch lobby for their interests and those of the social interest groups they represent. Cuts tend to result in increased lobbying efforts and may also lead to resistance against such measures or even protest (Guess & Savage, 2021, p. 15). It is important to bear this in mind when analysing budgetary processes during a period of democratization – a process characterized by the renegotiation of power and norms.

The political culture of a given country (Guess & Savage, 2021, p. 230) is a final element of budget politics that matters greatly for democratization. This variable helps analyses avoid falling into a tabula rasa idea of democratization by allowing us to embed budget politics in existing norms and practices as well as understand democratization as a period during which old and new rules and practices meet and create space for conflict over procedures and prerogatives. A long-term view of norms and practices additionally draws from the collective memory of a country (Langenbacher, 2010), which may be particularly relevant for postcolonial contexts in which a colonial past is deeply intertwined with fiscal politics.⁵ This also points to the general importance of considering perceptions regarding policies – something that has received little attention in the field of comparative policy analysis (Geva-May et al., 2018).

2. Tunisia’s political economy before and after the revolution

Following independence in 1956, Tunisia under Habib Bourguiba opted for a state-led economy built on import-substituting industrialization and high tariffs with the aim of protecting the country’s nascent economy. The massive expansion of social welfare and the provision of jobs in the public sector (Hertog, 2016) included in this approach was accompanied by an authoritarian order that widely restricted political liberties.

This authoritarian development state was characterized by the state-corporatist logic of incorporating employers (through the Union Tunisienne de l’industrie, du commerce et de l’artisanat - UTICA) and workers (through the UGTT) as well as the Tunisian Union for Agriculture and Fishery (UTAP) – a legacy that has shaped the political economy of Tunisia until today. While frequently the target of repression and divide-and-rule strategies, the UGTT managed to retain a powerful and relatively autonomous position within the authoritarian regime, likewise underpinned by a strong base of legitimacy dating back to its participation in the anticolonial struggle (Beinin, 2016). Following the bloody crackdown on the general strike in 1978, the UGTT became increasingly obedient to the ruling elite at the national level. At the grassroots level, however, the trade union federation remained autonomous and developed into an umbrella organization for disparate forms of opposition (Beinin, 2016; Yousfi, 2015).

Since the 1980s, Tunisia has witnessed the implementation of programs supported by international financial institutions aimed at promoting stabilization and structural adjustment (Harrigan & El-Said, 2010). While this transformation towards a market-led economy (that also undermined state corporatism) started slowly, it gained speed in the 2000s. As in many other MENA countries, privatization and liberalization did not bring about a free market but instead created a private sector dominated by cartels of regime cronies (Heydemann, 2004). In Tunisia, President Ben Ali and his wife’s family were the main profiteers from the withdrawal of the state, at a time when decreasing job opportunities led to high unemployment rates, particularly among the university educated (Touhami, 2012). Cuts to subsidies for basic goods ended in protests, most importantly the 1984 bread riots, as did stagnating wages (Walton & Seddon, 1994, pp. 171–214). Social contention reached its pre-revolutionary peak in 2008 during a six-month revolt by unemployed people in the phosphate mining region of Gafsa (Allal, 2010).

In the revolution of 2011, people chanted ‘Work, freedom, national dignity!’, showing that socioeconomic and political grievances were deeply intertwined (Chomiak, 2014). The first years after the revolution were, on the other hand, dominated by struggles over the establishment of democratic institutions and a dispute between Islamists and secular forces. Four civil society organizations including the UGTT and the business association (UTICA) helped bring the political transition to a successful conclusion in form of a new constitution (Boubekeur, 2016). After the elections in 2014, the anti-Islamist alliance Nidaa Tunis and the Islamist party al-Nahda managed to form a grand coalition. Yet, despite this, large social and economic challenges were left untouched, with governments muddling their way through the political transition phase and merely appeasing the demands of those protesting against unemployment by resorting to ad-hoc public sector recruitment. During this period, the workforce grew and spending on public wages increased rapidly while the economic situation deteriorated – with growth rates stalling at a low level, while unemployment and public debt increased (Adly & Meddeb, 2020, pp. 46–47, 62).

Amid this adverse socioeconomic situation, President Essebsi initiated the so-called Carthage Agreement of 2016, formalizing consensus politics across different social and political cleavages, including the UGTT and the UTICA (McCarthy, 2019), and building on the corporatist idea of inclusion. At the same time, an agreement with the International Monetary Fund (IMF) forced Prime Minister Youssef Chahed to implement a series of contested reforms, among them the reduction of subsidies, cuts to the public sector wage bill and the depreciation of the dinar. The latter contributed to high inflation, particularly for food, and added an even greater financial burden for ordinary citizens (Aliriza, 2020, pp. 37–39). The depreciation of the dinar became a major driver of further indebtedness, piled on top of the fiscal burden resulting from debt service (Observatoire Tunisien de l’Economie, 2019). Taken together, this placed massive pressure on the Chahed government to cut expenses and increase revenue, alienating the party base of both Nidaa Tunis and al-Nahda, which, coming from the different backgrounds of Bourguibism and Islamism, preferred strong state presence in the economy (Brumberg & Ben Salem, 2020).⁶ Two of the most contested measures forwarded by the Chahed government included a 1 per cent VAT increase in FL 2018, which caused nationwide demonstrations against the backdrop of stagnating wages and soaring food prices, and an attempt to freeze state expenditures for civil servant salaries. In 2019, the latter led the trade union federation UGTT to initiate its first economically motivated general strike since the revolution of 2011. The following sections present an in-depth study of both contested issues during the three phases of the budget policy cycle.

3. The negotiation phase: A lack of transparency and responsiveness

Article 66 of the Tunisian Constitution of 2014 sets out few clear requirements regarding the budgetary process, leaving most details to the Organic Budget Law (OBL) that dates back to 2004 for the period under study.⁷ Together, the Constitution and the OBL lay out a formal budgetary process: In March, the Ministry of Finance (MoF) gathers macroeconomic estimates and sends a budget circular to the administrative units. These units then send their financial requirements to the MoF by May. The MoF has until July to create the first draft of the FL, which is subsequently discussed and potentially modified by the cabinet. By the beginning of October, the FL draft is sent to parliament (IBP, 2014).

For the cases considered in this study, public participation in the process began in July 2017 and August 2018, but it was limited from the outset. First, only a small set of established organizations, such as UTICA, UGTT and UTAP, were given the opportunity to discuss the budget plans with the prime minister. Second, these organizations were included in the process before parliament was. Moreover, the general public and even parliamentarians only learned more about the government’s plans from public statements made by the social stakeholders who received a partial preview of the budget (Ben Said, 2017; WMC, 2018b). For both years, we see limited transparency in the negotiation phase that, as laid out in the following paragraphs, reflected the power relations in the political economy – with former state corporatist institutions being privileged over parliament and UGTT being the most powerful social actor among them.

The major issues of contention around the 2018 FL were raises in consumer and corporate taxes, most prominently a VAT increase of 1 per cent, as well as an expanded list of enterprises subject to the 35 per cent corporate tax. Despite having been included in negotiations early on, the UTICA voiced massive opposition to the 2018 FL, a departure from the discrete lobbying it normally pursues to promote the interests of its members behind the scenes. In this case, the UTICA made the threat of exiting the Carthage Agreement if the government continued to place the greatest financial burden on investors, referring mainly to the extension of the 35 per cent corporate tax but also to the VAT increase that would lead to rising prices and demands for higher wages. The organization also put forth a number of suggestions on the labour bill for how to save money in public spending (UTICA, 2017). Although it shared the criticism of the VAT increase, the UGTT did not prioritize this, merely including it as one demand among others, such as fighting corruption, addressing tax evasion, salary increases, more care for public enterprises and improvements to education and health services (UGTT, 2017).

The constellation of conflicts surrounding the 2019 FL was entirely different. Here, contention centred on the freezing of public sector salaries and the expansion of enterprises that had to pay the highest corporate tax rate. In contrast to 2018, the government did not bilaterally meet with UTICA, UTAP, and UGTT but brought them together for a single meeting in mid-September along with the prime minister and the president of parliament (WMC & TAP, 2018b). The UGTT boycotted the seminar due to an existing conflict with the government as negotiations about salary increases for public and civil sector workers were on the verge of failing (Mourad, 2018). Just before a public workers’ strike set for October 24, the trade union federation agreed with the government on salary increases for the public sector. However, the issue regarding the civil service sector escalated, initially leading to a relatively small strike on November 22. The UGTT constantly criticized Prime Minister Chahed, alluding to the alleged influence that the IMF had on the government and announcing a massive general strike of the public and civil service sector on 17 January 2019 (S.H., 2018b).

Despite this open conflict, the draft FL – which was approved by the government and sent to parliament in October – did not face major public criticism. In contrast to the 2018 FL, and likely a reflection of the approaching elections, the 2019 FL did not add any additional burden to normal households and also supported enterprises and investment (Nouria, 2018). This was generally welcomed, particularly by the business association, even if many believed the FL did not sufficiently address Tunisia’s structural issues of unemployment, tax evasion, and the informal economy (Ali, 2018). The strike and the topic of salaries and privatizations that the UGTT had aimed to prevent received little attention in the government discourse, while all parties including the notoriously anti-trade unionist Nahda party requested a compromise between the government and the UGTT (Sara, 2018).

When investigating the causes of contention against the finance laws, it is notable that the government changed the way it framed the budget: from necessarily painful (2018) to largely appeasing (2019), aiming to increase acceptance of budgetary decisions and of the government in general. It also changed the non-formalized process of deliberation with established civil society organizations: from bilateral talks to a joint summit in an attempt to better incorporate the latter. In both years, however, the government did not recognize the importance of the most publicly contested topics despite vocal criticism, pointing to a lack of responsivity that is supported by actions inside parliament as well.

4. Budget debates and ratifications: The FL in parliament⁸

Formally, the budgetary process grants parliament two months to discuss, amend, and ratify the budget. From October 15 on, the financial commission studies and modifies the FL draft, which is then passed on to the plenary in December, where it is to be approved by December 10.⁹ The president must sign the law for it to come into force on January 1. Parliament can only suggest new expenses or revenue reductions when accompanied by suggestions on how to compensate for any budgetary gaps (International Budget Partnership, 2014).

The 2018 FL was sent to the government for approval on October 11, leaving just four days for a review before being passed on to parliament and made public. The UGTT, the UTICA, and CONECT business associations, the UTAP and representatives of liberal professions were only officially invited to speak before the financial committee at the end of October. The budgetary process was criticized by the press, opposition parties, and economic experts for delays, for a lack of accompanying fiscal data and the absence of serious participation or open public debate (Le Temps, 2017a; 2017b; S.H., 2017). Specifically, economic experts argued that a lack of published fiscal data related to the FL would not permit for a real assessment of the budget.

Criticism from all sides of the socioeconomic spectrum regarding the content of the 2018 FL grew in intensity after the draft law was forwarded to parliament. As the newspaper Business News summarized: ‘Seldomly, if not ever before has a draft finance law been object of such contestation as the one of the next fiscal year 2018’ (Ben Achour, 2017). Moreover, conflict between private businesses calling for the privatization of non-strategic state-owned enterprises and the UGTT declaring privatization to be a red line intensified the entire debate (S.A., 2017). In the end, the UGTT deemed the results of the FL to be mixed, while the UTICA did not see any of its demands implemented and felt that the private sector was left to shoulder all additional financial burdens (2017a, 2017b). Only a few leftist politicians, among them the head of the financial committee, Mongi Rahoui, warned of ‘a social explosion’ due to the VAT increase (M.A. 2018).

In the second half of November, the financial committee rejected several individual articles and introduced two new ones, among them a sharp increase in import taxes on Turkish products (WMC, 2017). While the general VAT increase saw some groups voting against it, including the ruling party, al-Nahda, it was passed nonetheless (WMC, 2017). In the general plenary debate about the 2018 FL held on 6 December 2017, 46 MPs took part in the discussion, 29 of whom belonged to the ruling parties and 17 to the opposition. Of 29 MPs who were outright critical, 14 belonged to ruling parties. Among the 10 speakers from Nidaa Tunis, only three had a positive opinion regarding the FL. Among the 15 al-Nahda speakers, six MPs were largely critical and two MPs had mixed views. Taxation, as a topic that would lead to massive public contention, was mentioned by 25 MPs, though mostly in the context of tax evasion and the fact that the European Union had put Tunisia on a tax-haven blacklist. The actual cause for the protests in January (the VAT) was only mentioned by nine MPs.

In sum, the overall debate did not reflect the ongoing and impending social contestation around the FL. Subsequent heated discussions were connected to very specific issues of contention, such as tariffs on Turkish imports (M, 2017) or an ad-hoc tax increase on certain commercial sectors from 25 to 35 per cent, which was passed by the assembly.¹⁰ On December 9, the 2018 FL was approved by a vast majority.

In regard to the 2019 FL, the minister of finance informed the parliamentary groups of the ruling parties about the draft law in late September, before being officially accepted by the government on October 10 and handed over to parliament two days later (S.H., 2018a). The draft only reached the relevant parliamentary committees on October 30, and the financial committee decided to start reviewing it on November 8 – nearly one month later. Beginning in mid-November, the financial committee began hearing from business associations. The general feeling was one of satisfaction that the budget did not introduce any new taxes as well as disappointment over the lack of support for the private sector (particularly for small and medium-sized enterprises) and the fight against the informal economy (Business News, 2018). The conflict with the UGTT over salary increases for civil servants was playing out via the media, with harsh criticism directed against Prime Minister Chahed (S.H., 2018b). At the time, Chahed was already growing politically weak due to the gradual dissolution of his party Nidaa Tunis, with his minister of finance using parliament as a platform to defend government policies and raise awareness for other issues, such as social policies (e.g., new support measures for people working in the informal sector) (WMC & TAP, 2018a).

When the 2019 FL was discussed at the plenary starting on December 7, parliament witnessed a lively debate involving 40 MPs: 12 oppositional MPs, 14 MPs from Nidaa Tunis and 14 MPs from al-Nahda. Again, members of the ruling party were far from representing a government stronghold here. Of 14 Nidaa Tunis MPs, six held positive views about the law, three had mixed views and five were outright negative. Among al-Nahda members, the balance was even worse: only two MPs gave positive comments, eight had mixed assessments and four were generally critical of the 2019 FL. The basis for criticism was broad, with the most prominent issues including negligence regarding agriculture, insufficient measures to fight tax evasion and dissatisfaction over unemployment, high public debt, the parallel market, inflation, and low wages.

Again, as in the previous year, the ad-hoc amendments introduced into the FL were met with sharp criticism. A 1 per cent tax increase on all financial sectors (banking, insurances, telecommunication, hydrocarbon, and petroleum) was introduced last minute by members of parliament with the aim of supporting social welfare. This was not only criticized by business associations for being a misguided policy but also for breaching all negotiation procedures between stakeholders and discussions with the relevant parliamentary committees (Leaders, 2018).

Comparing the findings on the two legislative processes, it is striking that both were criticized for their lack of political responsiveness. Demands made by the UGTT and the UTICA were not taken into account, while promises previously made were ignored, harming the perception of the government as being responsive and reliable – and therefore trustworthy. The same behaviour was seen two years in a row, precluding any signs of a learning process or an adaptation of the rules. The analysis further revealed just how internally divided both ruling parties had become, not only the dissolving Nidaa Tunis alliance but also the Islamist party al-Nahda. The bones of contention were, however, only related to the issues of public contestation in part. Once again, just as in the preparation phase, a lack of responsiveness to concerns voiced by social actors could be identified as contributing to the public contestation of the budget laws.

5. The execution phase: Two different forms of public contention

Tunisia’s Financial Laws enter into force on January 1, which is when any new fiscal burdens start being felt by the population, be it via tax increases or the reduction of subsidies. As a result, protests against painful measures often occur in this month, with the bread riots of 1984 triggered by the doubling of bread prices still felt strong in the collective memory. Since 2011, the act of protesting has continued to be associated with commemorating the fall of Ben Ali on 14 January 2011.¹¹

The protests in January 2018 were, however, special as socioeconomic contention was also organized within the framework of a campaign called ‘Fech Nestanaou’ (FN) – a colloquial Tunisian phrase meaning ‘What are we waiting for?’¹² that started in late December 2017. Parts of FN included activists without membership in any formal organization, many of whom had participated in ‘Manich Msameh’ – another important campaign between 2015 and 2017 against the so-called Economic and Financial Reconciliation Law (Saidani & Gharbali, 2018; Weipert-Fenner, 2022). FN also resembled ‘Manich Msameh’ in that it adopted leaderless, horizontal decision-making procedures (Jaballah, 2019).

Street protests began on Habib Bourguiba Avenue on 3 January 2018, marking the 34th anniversary of the aforementioned bread riots. As one FN activist explained, this date was deliberately chosen, arguing that Tunisians should not be forever forced to protest against price increases and worsening living conditions every January (Belhassine, 2018). Other activists interpreted the finance law as a ‘war against the Tunisian people’ (Fech Nestanaou, 2018a) and therefore announced a ‘war against the war’. On Facebook, there were calls for protests from all over the country, with images of different street campaigns being posted.

While the press mainly minimized FN as a mobilization against high prices, it is evident from the catalogue of demands that this only represented one grievance among many. FN called for a rollback of public institution privatization, the broadening of social and health coverage for unemployed people, the expansion of social housing for families with limited income, an increase of financial aids programs for poor families, the employment for one person per family, the revision of tax policies regarding individual income and a national comprehensive strategy to fight corruption (Fech Nestanaou, 2018b). FN also included a direct appeal on January 16 for Tunisian workers to join its ranks, albeit without success. From January 7 on, repression by security forces became a central issue, with reports circulating that activists were being arrested and pictures emerging of the (alleged) use of tear gas against protesters. On January 8, a protester suffocated during street battles with the police in Tabarba (Manouba), leading to further mobilization and alleged episodes of night-time looting. During this time, the protesters started to defend themselves against accusations made by politicians and the media that FN was only instigating chaos, supported by the National Union of Tunisian Journalists (2018), which called on its members to report professionally and objectively on the protests and not succumb to the official political discourse.

The zero-compromise stance on the part of the government is remarkable here, as not even talks with members of the movements took place that could otherwise could have created an impression of responsiveness and the basic recognition of widespread socioeconomic grievances connected to rising prices and stagnating wages. This led to a further erosion of trust that the government was enhancing the wellbeing of citizens.

Public mobilization against the 2019 FL took place in form of strikes, the most significant of which was the general strike by the UGTT. The annual budget containing state expenditures for civil servant salaries had not foreseen any increase for 2019, thereby violating the Carthage Agreement that the UGTT had only joined (accepting IMF reform programs) under the condition of consistent salary increases.¹³ In response, the UGTT called on its 670,000 members employed in the public and civil service sector to join the strike (WMC & TAP, 2019). On 17 January 2019, workers went on strike nationwide, paralysing banking, transport, education, and large parts of the healthcare system (Dahmani, 2019). In the political debates, the collective memory of the 1978 general strike was evoked, underlining the massive scale of public contestation (Dermech, 2019). In the end, the UGTT reached a deal with the Chahed government over wage increases for civil service employees (Chennoufi, 2019). The IMF, which had regularly pushed for decreases in the public wage bill, heavily criticized the government for this in its fifth review (IMF 2019) and delayed the implementation of the arrangement, leading to a reduction in the overall grant from 2.83 billion to 1.6 billion USD.¹⁴

Given this development, it is clear that a massive power struggle had taken place involving the question of increased public spending for civil service salaries as one crucial part of the 2019 FL. Once the UGTT threw its full power behind the matter, it was able to outweigh the IMF. Concurrently, needing to resort to its most powerful tool (the general strike and the symbolic baggage it carries) marked a step far beyond business as usual. Relations with the government suffered, while trust in Chahed and the overall elite consensus evaporated in this conflict. Again, as in 2018, instead of too much consensus, the problem at hand was failure on the part of the government and parliament to deal with contested issues in the budgetary process and show responsiveness to social concerns – leaving public contention as the only channel for creating full awareness. The damage of broken promises, even if amended, further eroded trust in the government and parliament.

Conclusion

The difficult financial and economic situation faced by Tunisia offered little space for concessions, forcing the government to implement reforms that threatened to alienate parts of the larger elite coalition as well as the population. In line with the comparative literature on budget processes, the government under Chahed tried to find trade-offs – between more and less painful budget years as well as between burdens and concessions for individual social actors. Ultimately, however, ad-hoc and erratic decision-making (including by parliament) prevented attempts for compromise from delivering any appeasement. On the contrary, several measures to include UTICA, UGTT, and UTAP in the negotiation and ratification phase made things worse, as this raised expectations of political impacts of these associations. In the end, limited participation and transparency were met with low degrees of political responsiveness and reliability from government as well as parliament. In spite of widespread protests, social movements were not recognized as viable negotiation partner at all – being completely ignored and subsequently repressed.

It is important to note that the privileged role of the associations and trade union federation were not questioned in the public debate. Being integrated in budget debates much earlier than parliamentarians, for instance, was seen as normal – which once again highlights the role of path dependency in the political economy that was shaped by the legacy of state corporatism. In line with the literature about comparative budgeting on collective memory, the severity of the political crisis became clear via public contention, which grew massively in scope and took on forms that evoked collective memories of the bread riots of 1984 and the 1978 general strike – two critical junctures from the past. The continuity of power relations and social meaning behind certain protests is a reminder that democratization does not start as a tabula rasa but is shaped by the past, including the case of budget politics.

The analysis of two budget cycles also shows that, despite the increasingly difficult economic situation accounting for the government’s turn towards unpopular policies, the erosion of trust was largely due to specific behaviours by decision-makers and the given state of institutional development. Institutional procedures had not yet become firmly established and they were delayed or even changed over the limited period under of study here. Engaging in negotiations with the government about potentially harmful budget decisions in this unconsolidated institutional context required social stakeholders to hold trust in its government counterparts, which was lost along the way by ad-hoc decisions that violated prior agreements. This finding highlights the tension between trust and democratization: As transition literature tells us, the need for trust is great. At the same time, trust develops in light of lived experiences that shape assessments as to whether the other person or institution will (at the very least) do no harm.

Democratization as a moment of limited lived experience with a new political system is a time during which trust is more volatile. As such, the way that unavoidable yet important conflicts (such as over budgetary decisions) are carried out and handled has a direct impact on trust that citizens in general and social stakeholders in particular will come to hold vis-à-vis political institutions. While consensus in the overall democratic system is essential for democratization, institutional development aimed at managing conflicts in a constructive way greatly influences the experiences lived as well as the expectations placed in the new political system.

Acknowledgements

Research for this paper has been generously supported by a grant from the Volkswagen-Stiftung in the context of the research project “Struggles over Socioeconomic Reforms: Political Conflict and Social Contention in Egypt and Tunisia post 2011 in Interregional Comparison” (Grant Number 93325) – a cooperation initiative between the Peace Research Institute Frankfurt (PRIF), the Arab Forum for Alternatives and the University of Sfax. This paper also greatly benefited from the intense conceptual debates within the framework of “ConTrust: Trust in Conflict. Political Life under Conditions of Uncertainty”, a joint research initiative between Goethe University Frankfurt and PRIF, funded by the Hessian Ministry of Higher Education, Research and the Arts (Germany). Additionally, I learned a lot from discussions about this paper at the congresses ECPR 2020 and MESA 2020. I would like to particularly thank Dina Bishara, Thomas Demmelhuber and Jonas Wolff for their valuable comments on an earlier draft, as well as Meriam Belkadi, Vanessa Götz and Amr Sakr for their research assistance.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

The work was supported by the Hessian Ministry of Higher Education, Research and the Arts (Germany) [x]; Volkswagen Foundation [93325]

Notes

1. See the conceptual part on trust in contexts of conflict in Forst, 2022.

2. Arab Barometer, Wave II, III, and V, available at https://www.arabbarometer.org.

3. These findings support earlier research on consensus and trust in democracies, which highlighted the importance of constructive, i.e., accountable, conflict management instead of focusing too narrowly on pre-existing trust and consensus (Parry, 1976 141, see also Forst, 2022).

4. I searched the archive using the keyword ‘loi de finance’ for the time period of July 2017 to January 2018 and July 2018 to February 2019. I scanned approximately 1,000 articles per year. All articles quoted in this article were last accessed on February 9, 2022.

5. The French occupation of Tunisia in 1881 was the result of a process of indebtedness that started with a loan from a French banker in 1863 (Anderson, 1986, pp. 84–87). See also Fernández-Molina (2019) on post-revolutionary politics of debt in Tunisia.

6. Bourguibism and its inclination to the state development model should not be interpreted as a full-fledged party ideology. It is important to note that parties in Tunisia – apart from al-Nahda and minor left-wing parties – are not based on platforms or ideologies but organized around individuals, a fact that explains the volatility of the party system (Rivera-Escartin, 2022, 423, Yardımcı-Geyikçi & Tür, 2018).

7. A new OBL was only issued in 2019.

8. This section is based on a qualitative content analysis of parliamentary minutes, accessible via the official website of the Tunisian parliament: http://www.arp.tn/site/debat/AR/index2.jsp?c_t=6. The general debates of the FL analysed in-depth here were: session no. 18 from December 6, 2017, no. 29 from December 6, 2018 and no. 30 from December 7, 2018.

9. International best practices suggest three months or more for a legislature to work on an annual budget (International Budget Partnership, 2014). The context of democratization might require additional time for parliament to work through a complex issue such as the budget.

10. This caused a huge outcry from the affected economic sectors, particularly as Prime Minister Chahed had just one day prior pledged his support for representatives of large supermarket chains that were subject to the tax increases (Business News, 2017).

11. For an overview of protest developments in Tunisia post-2011 see Weipert-Fenner, 2022.

12. I analysed the content of all Facebook posts including uploaded documents of FN’s official site from the beginning of the campaign in between December 2017 until 2019.

13. See, for instance, UGTT: ‘Abassi : Le FMI n’a pas imposé le report des augmentations salariales’, Post, Facebook, November 13, 2016, https://www.facebook.com/ugtt.page.officielle/posts/1325368510870904/.

14. The Extended Fund Facility was finally cancelled in 2020, also in the light of the beginning COVID-19 pandemic.