The aim of this research is to test the relevance of underdevelopment trap concept, by showing through the economic performance, that the policy of disinflation has installed the Moroccan economy in a low balance. The purpose is to highlight the restrictive effects on the growth and employment, the orientation of monetary and fiscal policy. The proposed conceptual framework derives from the debates related to the rule versus discretion, independence and credibility of the Central Bank, fiscal sustainability and a cooperative policy mix. The evaluation of the policy mix implemented with rigor since 1998 is based on the articulation of analytical frameworks from the theories of the economic policy, the economy of the endogenous growth and analysis in terms of capabilities of Amartya Sen. Two lines of thought have been developed. The first one involves the incorporation of the concept of underdevelopment trap to the sluggish growth thus constituting, the main characteristics of the system of growth in presenting the constraints on the economy. The second puts the evaluation of the welfare on the opportunities and freedoms offered by public policies. In this sense, it is necessary to analyze the inferences that exist between the economic policy, social welfare and the capabilities. These analyzes have mobilized multiple empirical data in order to assess the contradictory factors that prevent the economic activity from achieving its potential growth. Thus, the first five chapters of the thesis deals with theoretical foundations and the underlying mechanisms that guided the policy makers in the choice of its economic policy. The fixed rules in regard to inflation and the limitation of public deficit, the coordination of monetary setting and for the management of public finances, the independence of the Central Bank, the structural reforms as well as the priority given to macroeconomic stability, attest and endorse the neoclassical foundations of the economic policy. Seeking monetary credibility through the fixed rule of 2% inflation led to an increase in the cost of credit. Indeed, maintaining high interest rates is counter to the interests of SMEs which are penalized by the rationing the amount of credit that they are the subject. In budgetary matters, reducing the deficit to 3% constitutes a rule that ensures the control of public finances and supports the issuing institute in its fight against inflation. The imperative respect for this rule, regardless of the adverse shocks that affect the economy, maintains the factors of blocking linked to the decline in demand and the global income. Public Decision makers are thus deprived the shares of redistribution and to regulate their situation likely to limit social disparities. The strict policy limits the guarantee of rights and freedom because of its resulting social costs. Youth unemployment, the difficulties of access to goods and basic facilities, poverty, underemployment and illiteracy are a lack of freedom and rights that restricts the range of choice and achievements. The growth deficit feeds the social deficit and the extent of inequality strengthens it. It appears, eventually, that the choice of the strict policy focused on inflexible rules ensures, certainly achieved the objective of macroeconomic stability, but at the cost of low growth and welfare. The effects of the financial crisis on the economy just confirm the fragility of the system of growth. The latter has channelled through the effects of income related to the decline in external demand through four channels of transmission: tourism, exports, and transfers from Moroccan living abroad and the IED. The rate of growth recorded between 2008 and 2010 remained low and employment declined. The impact of the crisis puts an end to the illusion of resilience of the economy and draws the attention to the fact that there is an alternative policy focused on growth and employment.
Economic Policy and Underdevelopment Trap in Morocco