Quality of Institutions and Economic Growth in Morocco between 1995 and 2020

Abstract

The study of the relationship between institutions and economic growth is essential for understanding growth dynamic within a country. In Morocco, this relationship is particularly important due to ongoing institutional reforms and the specific economic challenges the country faces. Economic institutions, such as fiscal policies, market regulations, and governance systems, play a pivotal role in establishing an environment conducive to growth.

The objective of this paper is to examine the impact of institutional quality on economic growth in Morocco. Theoretically, we present a literature review that studies the possible influences between the quality of institutions and economic growth. Empirically, we analyze these influences through econometric modeling (error correction model ECM) over the period 1995-2020.

The results of the ECM estimation allowed us to demonstrate that the quality of institutions has a significant impact on economic growth, particularly with the variable Corruption Perception Index (CPI), which negatively and significantly influences GDP growth. For the variables (DLC, DLE, DLT), the influence is positive, and positive but not significant for the variables (DLF, DLP).

Keywords: Institutions, Quality of institutions, Economic growth, error correction model.

JEL Classification: B22, C12, C13, F43

Paper type: Empirical Research