Public procurement and economic growth in Morocco: a non-linear econometric analysis by governance threshold

Abstract

Public procurement accounts for 15–17% of Morocco's GDP and constitutes a key instrument of economic policy. However, its actual impact on growth depends heavily on governance quality. This paper investigates the non-linear relationship between public procurement, governance and economic growth in Morocco over the period 1996–2024 (n = 28 observations). The empirical strategy combines OLS regressions and a threshold regression model inspired by Hansen (1999) and adapted for univariate time series. The results identify an optimal governance threshold of γ = 0.005. Below this threshold, the procurement-growth coefficient is negative (β?? = −0.257, p = 0.438). Above it, the coefficient is positive (β₂ = +0.525, p = 0.122), though statistically insignificant at the 5% level a result that calls for cautious interpretation. Education spending is a significant growth driver. This paper fills an empirical gap by applying, for the first time on Moroccan data for the post-2015 period, a two-regime governance-conditioned decomposition incorporating digitalisation and competition indicators rarely used in the literature.

JEL Classification : O43, H57, C24, D73

Paper type : Empirical Research