Impact of Public Expenditure on the Growth in Morocco: Role of Governance

Abstract

The objective of this study is to evaluate the effect of the public expenditure on economic growth in Morocco and to assess the quality of governance impact on public spending by using the Error Correction Model following the approach of Johansen. In the light of the results of the econometric regression, good governance remains the best option that allows the Moroccan government to achieve considerable macroeconomic performance. In fact, the budgetary component of total public expenditure has a long-term positive impact on the economic activity. It can be a good strategy for Morocco to invest in governance, which proves to provide low-cost long-term benefits. Overall, good governance improves the effectiveness of the budgetary policy and exerts a positive and significant effect on economic activity in Morocco.