An Evaluation of the 2014 Subsidy Reforms in Morocco and a Simulation of Further Reforms

Paolo Verme and Khalid El-Massnaoui
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Khalid El-Massnaoui: The World Bank

Chapter Chapter 3 in The Quest for Subsidy Reforms in the Middle East and North Africa Region, 2017, pp 63-90 from Springer

Abstract: Abstract Under increasing budget pressure, Morocco carried out an extensive set of subsidy reforms in 2014 and is planning for further reforms for 2015–2017, which will eliminate most consumers’ subsidies. This paper evaluates (ex post) the 2014 reforms and simulates (ex ante) the impact on household welfare, poverty, and the government budget of the total elimination of subsidies. The paper considers food and energy subsidies and estimates direct and indirect effects using SUBSIM, a subsidies simulation model designed by the World Bank. It finds that the 2014 reforms have been a good mix of reforms from a distributional, welfare, poverty, and government budget perspectives. They are perhaps the most rational reforms undertaken in the Middle East and North Africa region in recent years. The analysis also finds further reforms costly for the poor and more complex from a political economy perspective, especially for liquefied petroleum gas.

Keywords: Gross Domestic Product; Price Shock; Household Welfare; Poor Quintile; Rich Quintile (search for similar items in EconPapers)
Date: 2017
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Working Paper: An evaluation of the 2014 subsidy reforms in Morocco and a simulation of further reforms (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:nrmchp:978-3-319-52926-4_3

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DOI: 10.1007/978-3-319-52926-4_3

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