Public Investment in Infrastructure, Capital Inefficiency, and Economic Performance in Morocco: Insights from a Dynamic CGE Model

Public Investment in Infrastructure, Capital Inefficiency, and Economic Performance in Morocco: Insights from a Dynamic CGE Model | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Public Investment in Infrastructure, Capital Inefficiency, and Economic Performance in Morocco: Insights from a Dynamic CGE Model AYOUB KHARBOUCHE This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7923772/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Since the early 2000s, Morocco has undertaken extensive socio-economic reforms and intensified its public investment efforts to modernize the economy and expand infrastructure. However, despite having one of the highest investment rates in the world, the outcomes in terms of growth and capital accumulation remain limited. This situation, marked by capital inefficiency and the predominance of public investment (nearly 70% of the total, compared with only 30% from the private sector), highlights the central issue of efficiency and resource reallocation. This study evaluates the impact of public infrastructure investment using a dynamic Computable General Equilibrium (CGE) model (PEP-1-t), calibrated with the 2023 Social Accounting Matrix (SAM). The results show that industrial and agricultural infrastructure generate the most significant gains, while construction infrastructure yields more modest returns. These findings call for a strategic reallocation of resources, improved investment efficiency, and greater private sector involvement to foster sustainable and inclusive growth. JEL Classification: C68, H54, O18, O47. Macroeconomics Public investment Infrastructure Capital efficiency Economic growth CGE model Morocco Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7923772","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":533953881,"identity":"c37521d2-7e0b-44b9-a272-68b4e46bd20b","order_by":0,"name":"AYOUB 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Model\u003c/strong\u003e\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Public investment, Infrastructure, Capital efficiency, Economic growth, CGE model, Morocco","lastPublishedDoi":"10.21203/rs.3.rs-7923772/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7923772/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eSince the early 2000s, Morocco has undertaken extensive socio-economic reforms and intensified its public investment efforts to modernize the economy and expand infrastructure. However, despite having one of the highest investment rates in the world, the outcomes in terms of growth and capital accumulation remain limited. This situation, marked by capital inefficiency and the predominance of public investment (nearly 70% of the total, compared with only 30% from the private sector), highlights the central issue of efficiency and resource reallocation. This study evaluates the impact of public infrastructure investment using a dynamic Computable General Equilibrium (CGE) model (PEP-1-t), calibrated with the 2023 Social Accounting Matrix (SAM). The results show that industrial and agricultural infrastructure generate the most significant gains, while construction infrastructure yields more modest returns. These findings call for a strategic reallocation of resources, improved investment efficiency, and greater private sector involvement to foster sustainable and inclusive growth.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eJEL Classification:\u003c/strong\u003e C68, H54, O18, O47.\u003c/p\u003e","manuscriptTitle":"Public Investment in Infrastructure, Capital Inefficiency, and Economic Performance in Morocco: Insights from a Dynamic CGE Model","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-10-24 05:05:42","doi":"10.21203/rs.3.rs-7923772/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"31c357f7-4dc8-45cc-b448-a31b7935e8d1","owner":[],"postedDate":"October 24th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":56772676,"name":"Macroeconomics"}],"tags":[],"updatedAt":"2025-10-24T05:05:42+00:00","versionOfRecord":[],"versionCreatedAt":"2025-10-24 05:05:42","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-7923772","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-7923772","identity":"rs-7923772","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}