The Tunisia Systematic Country Diagnostic (SCD) seeks to identify the challenges and opportunities to achieve the twin goals of reducing poverty and boosting shared prosperity in a sustainable way. This SCD takes into account Tunisia’s historical sociopolitical context and the political economy of past reforms to provide the context for the challenges and opportunities that exist today to make progress toward the twin goals. The economic policies of the two decades preceding the 2011 revolution delivered widely recognized achievements, including growth rates above the regional average, impressive progress in human development indicators and reduced poverty. However, they failed to address, and even exacerbated, the deep-rooted distortions in the economy that closed the channels, in particular, productive employment and job creation, for a more equal and inclusive society. These distortions were also grounded in a tightly controlled social and political space that favored the elite while repressing others. This development model proved to be economically and socially unsustainable. With a new constitution adopted in 2014 and a democratically-elected government established in 2015, there is today an unprecedented window of opportunity for Tunisia to embark on deep structural reforms to open the channels conducive to a more equal and inclusive society and put the country on a path of more sustainable development. The SCD identifies key opportunities to build on Tunisia’s multiple strengths and economic potential to help guide future development policies. It highlights the importance of social and political stability (as well as domestic security) as prerequisites for critical reforms to be undertaken, as well as the importance of voice, transparency, and accountability in all economic and institutional spheres for those reforms to be sustainable.