Decentralization and Regional Economic Performance in Morocco

The paper examines an important, although poorly investigated, issue in developing countries; that is the impact of decentralization on economic and social disparities across regions. It focuses on Morocco, uses different econometric methods and available data. Constrains on the latter allow considering the impacts of only two indicators of fiscal decentralization (i.e. regional current resources and regional investment resources) on three indicators of regional economic performance (i.e. unemployment rate, manufacturing value added and employment). We found evidence that regional current resources contribute to improving regional economic performance but not regional investment resources. One reason of the contrast might be that local councils are unable to use the whole amount of investment resources they get.