Empirical investigation on the impact of public expenditures on inclusive economic growth in Morocco: Application of the autoregressive distributed lag approach

Abstract

Today more than ever, the international institutions (the IMF, the World Bank, the OECD and the UN) as well as the public authorities are interested in questions related to the development issue in general, and more particularly to inclusive growth. The reason is that in most developing countries, such as Morocco, the increase in economic growth does not necessarily and automatically have an effect on poverty and social disparities reduction. In this context, the study aims to analyse the impact of public expenditures, in particular the human capital development expenditure (education and health) and the public investment, on inclusive economic growth in Morocco through the use of the autoregressive distributed lag (ARDL) model on annual macroeconomic data from 1980 to 2018 and the bounds cointegration test of Pesaran. The results of the estimates show that, in the long term, public investment expenditures positively contribute to economic growth. Furthermore, they revealed that strong government action on human capital development expenditures is the most powerful instrument for enhancing inclusive economic growth in Morocco.