An evaluation of the 2014 subsidy reforms in Morocco and a simulation of further reforms

Paolo Verme and Khalid El Massnaoui

No 7224, Policy Research Working Paper Series from The World Bank

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: Transport Economics Policy&Planning; Energy Production and Transportation; Emerging Markets; Markets and Market Access; Taxation&Subsidies (search for similar items in EconPapers)
Date: 2015-03-30
New Economics Papers: this item is included in nep-ara and nep-cmp
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Citations: View citations in EconPapers (8)

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Chapter: An Evaluation of the 2014 Subsidy Reforms in Morocco and a Simulation of Further Reforms (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:7224

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