Tax Farming: Anachronism or Optimal Contract?* *We wish to thank Khalifa Ghali, Mahmoud Chtourou, Director, Ministry of the Interior and Khalifa Chaouch, Faculté de Lettres de Tunis for their help in obtaining the information used in this study. We also thank Timur Kuran, Mohamed Bechri and Bruce Herrick for suggestions and comments. Portions of this paper in revised form appeared as “Contractual Choice in Tax Collection Activities: Some Implications of the Experience with Tax Farming” in Journal of Theoretical and Institutional Economics, V. 144 (1988), 684–705. Permission to draw upon that paper is gratefully acknowledged.