Improving Morocco Public Administration

However, many social indicators were still lagging those of comparable countries, especially those on poverty, equity, health and education. The low performance of public services delivery and weak governance were contributing to the disparity between economic growth and improvements in social indicators. Public administration in Morocco was characterized by the lack of a multi-year vision on budgeting, by excessive centralization, and by poor civil service management, including a high-cost wage bill out of proportion to its 7 percent share of the labor force).

Approach

Since 2002, the government has implemented a comprehensive Public Administration Reform Support Program (PARP). Public administration reform is viewed as a core component of improving governance and is central to the economic and social reforms that the Government is carrying out to improve economic performance and enhance its capacity to achieve sustained growth.

The aim of the PARP is to provide Morocco with a modern and gradually de-concentrated administration that could contribute to the competitiveness of the economy and to the sustainable development of the country while ensuring the viability of its macroeconomic framework. The key objectives of the reform program are to improve government efficiency in budget management and human resources management; consolidate and control the public payroll; and improve service delivery and simplify public procedures through e-Government (since 2007).

Results

Under a reform program supported by funds and technical support from the International Bank for Reconstruction and Development (IBRD), Morocco’s administrative tradition is evolving from strict and bureaucratic legal compliance to a search for performance and more effective public service. While this change in the administrative atmosphere still needs to develop further, it has already yielded a number of achievements. The IBRD loan and the accompanying analytical activities have served as a vehicle for the articulation of a comprehensive medium-term framework for economic policy and institutional reform.

The budget reform actions taken in the context of the PARP contributed to the improvement of budget management parameters, especially execution rates of the economic and social investment projects, which increased from 64 percent in 2002 to more than 73.5 percent in 2008. Another important achievement of the PARP has to do with the timely preparation and submission to the Parliament of the Annual Budget Execution Reports (ABER). Preparation delays have been significantly reduced during the last few years, when the government has made significant effort to adopt and submit all overdue ABERs (those of 2003– 2006) to the Parliament by the end of 2008.

During 2009, the government also adopted and submitted the ABERs of the fiscal years 2007 and 2008. In addition, the PARP has led to improved structure of the budget as more resources have been channeled to investment. The share of investment in total expenditures increased from 17 percent in 2002 to 19 percent in 2008. The improvement in the structure of expenditures has been achieved through reducing the shares of recurrent expenditures (from 65 percent to 56 percent), including of the wage bill (from 50 percent to 44 percent). The PARP strategy also entailed the streamlining of the civil service, and improvement of service delivery in the social sectors.

The voluntary retirement program implemented in 2005 allowed the government to restructure civil service in favor of the social sectors, through targeted recruitments to fill the gaps in needed skills and in understaffed areas and sectors, especially in education and health. Data for 2008 show that 89 percent of recruited civil servants (not counting security and military) joined the education and health sectors (69 percent in education and 20 percent in health). The PARP sought to enhance the skills of civil servants also through training. In this regard, credit earmarked to training has been raised by 60 percent since 2002 (from Mad 111 million to MAD 176 million).

Steady implementation of the PARAP resulted in subdued recurrent expenditures, including a continued decline in the wage bill relative to GDP. The main measure to control the wage bill consisted of the successful voluntary early retirement program (ERP) implemented in 2005 and subsequent measures to limit hiring to the actual needs, mostly targeted to the education and health sectors. Although the size of the central government personnel has now reached its pre-reform level, its skills mix, its geographic and sector coverage, and its age structure improved significantly. The combined effect of these measures translated into declining wage bill, which, in 2008 edged down to 10.2 percent of GDP compared to 10.7 percent the previous year (and 11.7 percent in 2005). In 2009, it would virtually stay at the same level as in 2008 (10.3 percent of GDP), despite wage increases for low-income civil servants as part of the fiscal stimulus package to alleviate the effects of the global crisis.

The e-Governance agenda is also taking hold with a clear institutional framework now in place and the design of as much as 89 projects conceived to improve public sector efficiency and transparency.

IBRD Contribution

The main characteristic of Bank support to the PARP has been the continuous combination of programmatic DPLs and programmatic advisory and analytical activities (AAA). Both actions have been reinforcing each other and have provided the momentum for continuous progress. The lending amounts of the PARLs have been as follows: PARL I US$100 million, PARL II US$120 million, PARL III US$100 million, and a fourth operation is planned for an additional US$100 million.

Partners

Support to public administration reform has been developed in close collaboration with the European Union (EU) on both the technical assistance and financial aspects. The African Development Bank (AfDB) soon joined the Bank and the EU to form a steady partnership in support of the reform. The government itself has financed a number of technical assistance activities.

Alongside operational support, donor coordination has been developed also for the analytical agenda supporting the PARP program, thus allowing for cross-fertilization from work developed by other agencies. Analytical products, reports, and mission evaluations are shared on a regular basis among donors.

In certain areas the Bank relies almost exclusively on the leadership taken by partners. For example, the EU has taken the lead in providing technical assistance for the reform of the Budget Framework Law. The activity assists a working group, composed of civil servants from the Budget Directorate of the Ministry of Finance, in carrying out the preparatory work to the reform of what is often called the “financial constitution”, based on existing domestic experiments and international experience. The working group has proposed a new budgetary nomenclature and will successively address the main issues that should structure the new framework law, namely, performance, transparency, and accountability. In addition, between 2003 and 2010 the EU has supported measures to strengthen institutional capacities in 17 ministries and public institutions in the context of the implementation process of the European Neighborhood Policy Action Plan concluded in 2004. The focus of this work is the know-how transfer or administrative twinning in the areas defined in the Action Plan.

Next Steps

The fourth PARL operation concludes the second PARL series. Looking ahead, a third new series is envisaged to support the next phase of the reform program. The PARP agenda will focus on several key dimensions: (i) the finalization of the draft Organic Budget Law (OBL); and (ii) the completion of the de-concentration strategy and (iii) the conclusion of the preparatory work and subsequent implementation of the current phase of human resources reform. In line with the new IBRD Country Partnership Strategy objectives, the Bank is prepared to design a new PARL series to support the next PARP phase and further strengthen the results orientation of the program for enhanced service delivery thus fostering the mainstreaming of the reform objectives in key line ministries. In addition the new series would further reinforce donor harmonization as it will be developed in full coordination with the next EU and AfDB programs which should materialize around the same time frame and with similar objectives. This will contribute to an even more effective multi-donor support to the government reform agenda as joint discussions with government to develop the new program are tentatively planned to start in the spring of 2010.