Financial divergences of equalization and their impact on regional development in Morocco

Abstract

The purpose of this article is to analyse the impact of financial equalization on regional development in Morocco. While the redistribution of wealth through the financial equalization mechanism promotes equality and equity in favour of poor and disadvantaged regions, this mechanism still suffers from several shortcomings. The following analysis confirms that financial equalization has an amortization effect both on the donor regions that are forced to allocate part of their resources and on the recipient regions that risk falling into a development trap. Notwithstanding this analysis, equalization promotes solidarity and equality between territories; however, the actual situation on the ground confirms that this mechanism does not encourage beneficiary regions to improve their tax effort or develop their development strategies. The effectiveness of the equalization system therefore requires a detailed understanding of the reasons for inequalities in order to act on the causes rather than on the symptoms. Points for practitioners In the processes of territorial public management, the scarcity of financial resources is all the more reason to opt for more efficient investments. The quality of investments is more important than their quantity. The adoption of such an approach is a strategic move if disastrous consequences on public facilities are to be avoided in the long term. The various levels of local authorities must also take responsibility for improving their own resources and building up their development strategies.