Fiscal Decentralization and Economic Growth in Morocco: A Panel Cointegration Analysis

Meriem Miri, El Hassan Taacha, Mohamed Ayman Benatia

Abstract


This article focuses on the effects of fiscal decentralization on economic growth in Morocco, taking into account three dimensions: expenditure decentralization, revenue decentralization and the composite of these two indices. It uses a co-integration panel approach to separate long run effects from short run dynamics; By using and revising the set of data generally used in these empirical analyses. The results show that fiscal decentralization can lead to significant long-term economic growth (particularly significant for revenue decentralization), but in the short-term, this leads to a decrease in economic growth. Indeed, short-term results show that fiscal decentralization generates in the very short term a decrease in economic growth before improving over time until reaching a long-term increase between 2003 and 2014 in Morocco.

Keywords: fiscal decentralization, economic growth, Morocco

JEL Classifications: C2, H7


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