Structural change in Morocco: Rethinking industrial policies

Abstract

This article examines Morocco's structural transformation from 1960 to 2018, utilizing a longer time frame and a more detailed sectoral breakdown than previous studies. Our methodology combines the decomposition of labor productivity growth and structural decomposition analysis to assess the intensity and efficiency of sectoral shifts. Our findings indicate a significant increase in productivity from 2000 onward, primarily driven by within-sector productivity, unlike earlier decades where between-sector changes played a larger role. Since 2010, the manufacturing sector has emerged as the main driver of structural change. Additionally, both approaches highlight the overall slow pace of structural transformation in Morocco, predominantly due to the negative impact of foreign trade. In contrast, domestic demand and technological change have positively impacted sectoral growth. While sectors like automotive, aerospace, and service subsectors have shown growth potential, industries such as textiles, and agriculture remain vulnerable to external shocks and global competition.