The power of price subsidies in Morocco

Abstract

The Moroccan system of ‘compensation’ subsidises products that are deemed to be important for household purchasing power: butane gas, flour, bread, sugar, and fuel (until 2015). This article offers a historical sociology of this system, which was inaugurated during the colonial period in 1941 and which survived criticism from neoclassical economists working in international financial institutions. It demonstrates that the system’s resilience and the transformations it underwent can be analysed by treating it as a means of exercising power. Subsidies make it possible to involve private actors in governing social issues. It also helps to regulate economic and political rivalries and alliances through market interactions and competitive relationships, including around the King’s Palace. The administrative mechanisms used to calculate the subsidies and the retail prices also shape the relationships between operators in the various sectors, while allowing opaque and rentier management. In addition, despite being the subject of social demand, the compensation system has been criticised by technocrats and protest movements, particularly after the ‘Arab Spring’ revolutions in 2011. The article is based on an analysis of the practical procedures of compensation in the contemporary period, in particular concerning flour and bread, and to a lesser extent butane, as well as on an analysis of the debates and struggles that subsidies has given rise to within Moroccan society, its State administration, and its political parties.