Investment budgetary expenditures on equipment and transport and economic growth in Morocco

Abstract

In Morocco, budgetary expenditure on investment in equipment and transport consumes a large part of the budget. This spending is aimed at developing infrastructure to ensure economic emergence, by strengthening the highway and expressway networks, developing and modernizing the railway network, and continuing to implement the national port strategy. Since the early 1990s, several studies have attempted to determine the relationship between infrastructure investment expenditure and economic growth, using econometric models. This paper falls into the same direction and aims to present the contribution of budgetary expenditure on capital and transport in promoting economic growth in Morocco, by first analyzing its evolution, and then estimating a VAR model to define the direction of causality between four variables namely, the growth rate, the gross fixed capital formation, the capital expenditure on equipment and transport, and the investment expenditure on housing and development.