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The World Bank Group's Engagement in Morocco 2011-21

Chapter 4 | Enabling Policy Implementation

Highlights

During the evaluation period, Morocco adopted ambitious sector strategies and reforms but, according to the New Development Model, has struggled to implement them because of limited experimentation with new development practices, a limited government culture of learning and adapting, and a tendency for public agencies to operate in silos with development solutions that are divorced from the local context.

The World Bank Group helped Morocco overcome implementation bottlenecks by introducing good practices from other countries, facilitating South-South learning, and mitigating innovation risks.

The Program-for-Results has become the World Bank’s instrument of choice in Morocco since its introduction in 2015 because it offers flexible results-based financing and incentivizes cross-sectoral policy implementation. However, its effectiveness depends on several conditions that are not always met, including its association with technical assistance and demanding disbursement-linked indicators.

More recently, the World Bank has begun to address the low levels of trust among state institutions and between Moroccan citizens and the state that have undermined policy implementation.

This chapter discusses the Bank Group’s efforts to address Morocco’s third systemic obstacle: the public sector’s weak capacity to implement policies.1 The latest Arab Barometer survey (2019) shows that one in four Moroccans consider the low quality of public services to be the most important challenge facing the country. Interviews with government counterparts echoed this diagnostic; as one official put it in an interview, “We are quite strong at designing reforms and strategies, but our Achilles’ heel is implementation.” The NDM describes the causes for the weak capacity as limited experimentation with new development practices, a limited culture of learning and adapting, and a tendency for public agencies to operate in silos with development solutions that are divorced from the local context (CSMD 2021). The Bank Group’s strategies for improving the public sector’s implementation and service delivery capacity have evolved during the evaluation period. The FY10–13 CPS emphasized improving basic service delivery and infrastructure across sectors, and the two subsequent strategies emphasized strengthening governance, institutions, and public sector management. Overall, this chapter finds that the Bank Group helped build Morocco’s implementation capacity across outcome areas by (i) introducing best development practices from other countries, (ii) promoting learning and adapting that changed the government’s operational culture, and (iii) building trust by facilitating coordination among government entities and between national and subnational actors.

Introducing Best Practices

Bank Group clients acknowledged the Bank Group’s role in introducing novel approaches to reform implementation. High-level government officials interviewed for this evaluation emphasized the Bank Group’s ability to bring good practices to Morocco and facilitate peer and South-South learning from other countries as two of its key strengths. As one government official put it in an interview, “the Bank Group is always ahead of the game, proposing reforms and innovations one or two years before our departments would express a need; overall this is a good thing even if it creates friction in our calendars.” Another interviewee emphasized that “the Bank Group’s capacity to bring the best global expert on a topic is unparalleled among development partners.” They argued that successful innovations depend on the Bank Group’s ability to cocreate the innovation with Moroccan authorities and properly pilot it before scale-up.

The World Bank helped Morocco modernize its social protection system with novel implementation approaches. The World Bank was the government’s main partner in framing, designing, and implementing a modern social protection system within 10 years. Starting with an overall social protection strategy in 2009, the World Bank provided the government with options for developing an integrated set of social protection policies to replace regressive subsidies. The strategy recommended establishing the Unified Social Registry as an essential step. The World Bank then helped the Ministry of Interior to create the National Population Registry, which would also work as the anchor to the Unified Social Registry through a unique identifier.2 The project introduced biometrics for accurate and low-cost authentication and incorporated the Modular Open-Source Identity Platform for verification. The World Bank facilitated an effective South-South learning exchange with ID4Africa and India’s Aadhaar, a global leader in biometrics, to introduce biometric identification technology with a unique identifier number generator and a proxy means-testing eligibility formula. Interviews with high-level government officials confirmed that these exchanges moved the reforms forward. Interviews with development partners engaged in social protection also recognized the World Bank’s contributions to building this modern system. The National Population Registry is being piloted in Rabat and should be rolled out nationally in 2023, as should the Unified Social Registry. Moreover, the World Bank adapted to coordination challenges by working with an important champion in the Ministry of Interior, which had the clout and ability to coordinate actions across agencies, establishing an interministerial steering committee and creating the National Registry Agency to coordinate the two registries. In other examples of novel approaches, the World Bank introduced psychotechnical tests for teacher recruitment in the education sector and embedded digital solutions in 25 projects, about 20 percent of the Bank Group’s portfolio, with a significant increase in digital solutions since 2019 (figure 4.1).

Figure 4.1. The Distribution of Digital Solutions across Applications

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Box plot showing increase in the share of projects that embed digital solutions since 2019.

Figure 4.1. The Distribution of Digital Solutions across Applications

 

Source: Independent Evaluation Group.

Note: This exercise covered World Bank financing and International Finance Corporation investment and advisory services. World Bank advisory services and analytics are excluded. N = 25 projects.

The Bank Group used its convening power and financing options to mitigate Morocco’s innovation risks for developing its solar energy sector. Morocco set ambitious targets to develop renewable electricity generation, and, in the early 2010s, concentrated solar power (CSP) technology was the most viable option to replace coal-fired power plants. However, developing this technology meant overcoming investment risks and the government’s limited experience in implementing PPPs. Morocco turned to the Bank Group as the lead partner in this endeavor because of its credibility in the sector, convening power, and financing instruments, including available concessional funds, which decreased the technical and commercial risks associated with innovative projects. The World Bank and IFC took the lead in advising the Moroccan Agency for Sustainable Energy on how to structure the Noor Ouarzazate Project and supported the agency in generating interest among other financiers (including KfW Development Bank, the European Investment Bank, and the African Development Bank) and among private investors to participate in the bidding process for the PPP. The World Bank and IFC took the provided technical support to the Moroccan Agency for Sustainable Energy to develop the CSP technology. This support led to a successful $5.6 billion CSP program in Ouarzazate, which was the first of the Middle East and North Africa Region and reached a total CSP generation capacity of 510 megawatts, making it the largest CSP power plant in the world. The World Bank then adapted to new evidence and significant price drops in solar photovoltaic technology to support the next phase of investment, which consisted of building a hybrid CSP-photovoltaic plant. Through this process, the Bank Group facilitated a total solar generation capacity of 602 megawatts, which in 2020 corresponded to 5.6 percent of the country’s total installed generation capacity. However, the Bank Group made little progress in improving market and regulatory conditions to enable the distribution of electricity from smaller-scale renewable energy sources. The Bank Group also mitigated Morocco’s innovation risks for projects in disaster risk reduction, behavioral science, and credit agencies and collaterals.

The World Bank introduced PforR financing to Morocco, which became the country’s instrument of choice. In 2012, the World Bank initiated the first PforR operation in Morocco, followed by a second operation in 2015. Since then, seven additional PforR operations have begun, effectively making the PforR the preferred instrument across almost all sectors. Initially, teams found program preparation and the selection of disbursement-linked indicators (DLIs) to be challenging, as was the case with the first health PforR. However, these processes became smoother as teams adjusted to the instrument. There are several reasons why this instrument has rapidly gained traction. First, the PforR was a promising alternative to IPF, which was the most popular instrument before the evaluation period but had faced severe implementation issues during the evaluation period, and to DPF, which the World Bank relied on during the first part of the evaluation period as the government focused on passing first-generation sector reforms. Second, the PforR appealed to Moroccan authorities who thought it would help them shift toward results-based budgeting and focus on implementation. In interviews, government officials appreciated that the preparation of PforR and the choice of DLIs allow line ministries and the Ministry of Economy and Finance to negotiate budget allocations based on a clear results chain to guide implementation. Third, government officials consider PforR well suited for cross-sectoral programs, which became more common in the second half of the evaluation period, because it requires all involved ministries to agree up front on the program’s objectives and success measurements. As one government official put it, “PforR shakes up the status quo; ministry staff may resist it, but ultimately, it serves us and our results well.”

PforR performance in Morocco depends on three conditions that are not always met. There is insufficient evidence to determine PforR effectiveness because only one of the nine PforR operations in Morocco had closed by the end of the evaluation period. Therefore, the evaluation examined the conditions that contribute to PforR success based on interviews, progress reports, and DLI classifications. Three main conditions emerged from the analysis. First, when DLIs are outcome oriented, they can drive progress. This evaluation’s DLI analysis shows that World Bank teams in Morocco found it challenging to define DLIs that captured higher-level outcomes while simultaneously providing predictable disbursements. For example, the first PforR operations in Morocco—the INDH, Health, and Disaster Risk Reduction PforR—were achieved well ahead of schedule because their DLIs were not sufficiently ambitious. Several government counterparts noted that these DLIs were “superficial,” “easy to game” or achieve, and an unhelpful proxy for measuring a program’s added value. Conversely, easily achievable DLIs also made disbursement schedules easy to predict. Government officials said that they preferred ambitious DLIs if they were achievable and if government systems could measure them without onerous requirements to collect additional data. Second, if World Bank teams proactively involve the full range of stakeholders during the PforR operation’s preparation and facilitate productive dialogues to define ambitious but achievable DLIs, they can increase the potential impact of the operation. Third, when the World Bank provides technical assistance to the line ministries in charge of achieving and reporting on DLIs, implementation improves. However, there is currently a limited number of mechanisms to finance supplementary technical assistance in Morocco. To date, there has been only one experience of pairing PforR with reimbursable advisory services to support the ECD PforR. So far, the government has been reluctant to borrow for technical assistance, and the World Bank’s budget is insufficient to finance technical assistance needs. As a result, the World Bank must acquire trust funds or outside donor resources to provide technical assistance in Morocco. In interviews, both government counterparts and World Bank staff said that technical assistance helped mobilize line ministries, achieve ministry buy-in, incentivize reporting, and promote change management. This evaluation’s comparative review of PforR corroborates the interview findings: PforR operations with supplementary technical assistance performed better than PforR operations without it (appendix B).

Learning and Adapting

Weak adaptive management capacity can undermine the advantages of Morocco’s long-term policy continuity. Morocco has a high degree of regime stability and policy continuity compared with other countries in the region. This stability allows the World Bank to use long-term investments through “repeat projects,” or series of interventions, that span more than a decade and provide an opportunity to reach higher-level outcomes. For such series to remain relevant and overcome failures, the World Bank and its government counterparts must adaptively manage them. However, the NDM highlights shortcomings in the government’s capacity for this adaptive management. These shortcomings include the government’s “culture of compliance,” rather than “of leadership and performance management”; its limited experimentation with new approaches before expanding them; and its lack of effective monitoring, evaluation, and learning practices (CSMD 2021, 39).

The World Bank helped Morocco decentralize its education system and reform its teacher training after learning from previous attempts. The government’s education decentralization started in 2000 with the creation of the Regional Education and Training Academies (Académies Régionales de l’Education et la Formation professionnelle; AREFs). However, by 2010, central authorities still controlled most financial and human resources for education. In response, the World Bank’s DPF series to support Morocco’s Education Emergency Plan (2011–13) used prior actions to devolve 50 percent of the Education Ministry’s human resources, including teachers, to AREF and called for AREF to share “program contracts” with the ministry to justify spending. The series also used prior actions to initiate an arduous reform of teacher recruitment, training, and professional development. However, the World Bank did not sufficiently anticipate the central government’s low capacity for steering reforms or AREF’s low capacity for managing new responsibilities. As a result, the lack of complementary technical assistance was a major weakness of the DPF. In addition, the Implementation Completion and Results Report found that program contracts were not legally binding, lacked performance rewards or sanctions, and were not adequately monitored or evaluated (World Bank 2013). In 2017, the World Bank adapted by providing complementary support to the education PforR, which included financial analyses to identify implementation bottlenecks, the mobilization of international expertise to build capacity and trust across levels of government, and more rigorous performance contracts that spelled out expected results and included an M&E mechanism. Contracting between the various administrative levels was institutionalized by law in 2021. Teacher training and recruitment have also been overhauled with the addition of a requirement to obtain a bachelor’s degree as a condition of employment to teach in primary education (MENFPESRS 2021).

The World Bank effectively implemented complex irrigation reforms by actively engaging in learning and adapting processes. In the Modernization of Irrigated Agriculture series, the World Bank used learning and adapting processes to expand the series’ focus from infrastructure in 2012, to water management and modern irrigation technologies in 2014, and to climate adaptation techniques in 2021. The series’ design required behavior change techniques to transfer knowledge and raise farmers’ awareness of the merits of drip technology. The World Bank adapted the series from one project to the next, collecting and considering new information on climate change, precipitation levels, and the risk that mass adoption of drip irrigation would significantly increase total water consumption. The series’ M&E practices also evolved to measure crop diversification, water resource management, water service delivery, and the dynamic effects of climate change. The M&E showed that projects led to a negative water balance; thus, the World Bank began policy dialogues with the government to implement a quota system for water use, introduced net-metering practices, and optimized farmers’ use of ground and surface water through tradable water allocation programs.

Conversely, results for a series on rural water and sanitation suffered when the World Bank did not sufficiently engage in learning and adapting. At the beginning of the intervention series, the World Bank did not sufficiently discuss with the government which technology the series should use to move toward universal access to safe water in rural areas. The initial choice of shared connections, instead of individual household connections, contrasted with the option preferred by donors and consumers. It was not until the series’ fourth project, after its flagship infrastructure diagnostic, that the World Bank finally adapted and switched to individual connections. In addition, the World Bank did not adapt to the past mismanagement of social and environmental safeguards when designing follow-on projects in the series, thereby repeating past mistakes and leading to unsatisfactory project ratings. Throughout the series, implementation bottlenecks and capacity constraints hindered compliance with national regulations and World Bank safeguards in land acquisition and compensation. This lack of compliance led to implementation delays and unfinished activities. These capacity issues surfaced early in the series, and the first project was rated unsatisfactory as a result. Similar issues surfaced in the second operation, with the World Bank providing inadequate safeguard supervision. This was caused by high turnover among the World Bank’s social development specialists, which led to problems with land acquisition, resettlement, and compensation and contributed to another unsatisfactory rating. The third project in the series continued this trend of mismanaging safeguards and was nearly canceled because of noncompliance with the World Bank’s involuntary resettlement safeguard policy, as 3,000 resettled people were not compensated. This threat of cancellation led the World Bank and the government to jointly address safeguard issues and systematize the resolution of the compensation process, leading to a project turnaround and improved implementation after more than 10 years of unsatisfactory ratings. Box 4.1 summarizes the Bank Group’s contributions to climate change resilience.

Building Buy-in and Coordination

Issues linked to low level of buy-in and uptake of development solutions undermined policy implementation. A systematic review of Implementation Completion and Results Reports for projects that failed to achieve their objectives revealed that a common feature of these projects was the Bank Group’s inability to anticipate and overcome issues of low uptake or distrust by development actors involved in reform implementation. There are four illustrative examples:

  • PMV: The World Bank’s support for Morocco’s PMV included making the government’s financial support for agribusiness value chains conditional on contractual arrangements among smallholders, private investors, and the government. The program failed to gain buy-in from smallholders. A 2019 review of contract farming in the Moroccan cereal sector found that only 8 out of 120 agricultural aggregation projects received certificates of aggregation. The PMV established special courts to resolve contract-related disputes between smallholders and investors, but this did not resolve the issue in part because of limited uptake of judicial services.
  • Waste management: The World Bank’s mobilization of carbon funds in solid waste management failed because landfill operators did not trust that the program would be financially viable or that municipalities would be in a position to transfer carbon fund benefits to operators given municipal arrears for landfill service (World Bank 2022b).
  • PPPs: IFC’s seven PPPs in health, education, and road improvement never materialized in part because private sector partners were reluctant to enter sectors that had been historically dominated by the state or SOEs. According to interviews, private firms anticipated high barriers to entry and resistance from SOEs.
  • Electronic petitions: Morocco’s World Bank–supported e-petition system, which enables citizens and civil society organizations to electronically petition the government or parliament, remains underused. Even after the Petition Parliamentary Committee followed the World Bank’s and the Westminster Foundation for Democracy’s advice to lower the threshold for taking up a petition, the number of e-petitions submitted has remained low.

During the decade covered by this evaluation, the Bank Group helped authorities improve coordination among government agencies in multisectoral reforms to overcome silos. The NDM report shows that implementation challenges in Morocco, particularly for reforms that involve multiple sectors and implementing agencies, are exacerbated by ministries operating in silos. During the evaluation period, the Bank Group tested different mechanisms to help authorities improve coordination among ministries and between central and subnational authorities. Three examples illustrate these approaches. First, the World Bank’s Modernization of Irrigated Agriculture series provided technical assistance to the Regional Agricultural Development Offices to improve their coordination with the central government ministries responsible for water management issues. This coordination led to a common water management plan. Second, starting in 2016, the World Bank addressed the lack of coordination within INDH’s ECD component, which a 2011 government evaluation said was one of the program’s main impediments (CESE 2013). The World Bank was successful in bringing together five ministries, multiple civil society organizations, and private businesses to develop a common results framework for the INDH’s ECD phase. Third, the Bank Group piloted two subnational operations in Casablanca and Marrakech to strengthen coordination between the national CNEA and the subnational CRIs. Previous DPLs noted that further progress on the Bank Group’s competitiveness agenda demanded better coordination between national and regional entities. As a result, the Bank Group facilitated lengthy negotiations to determine the roles of central and regional authorities and establish a coordination mechanism.

The World Bank invested in a Political Economy Facility (PEF) to understand the trust and political economy issues related to reform measures. The fifth wave of the Arab Barometer, conducted in 2019, revealed that Moroccans are less likely to trust the government than in previous waves, with just 3 in 10 Moroccans having high trust in the government compared with 4 in 10 for the previous waves (Arab Barometer 2019). The Maghreb Country Management Unit realized that trust and other political economy issues hindered implementation, so it created the PEF in 2017 to better understand political economy issues and provide day-to-day support to select operations. The PEF provided funds for World Bank governance and political economy experts to produce just-in-time analytics and recommendations to help task team leaders and the country team prepare operations. For example, in 2021, a PEF survey showed a strong association between people’s perceptions of service delivery and their trust in public institutions—people who believe that public announcements on service delivery are always or often implemented are 19 percent more likely to trust government institutions. The survey also showed that a citizen’s trust in institutions has an impact on that citizen’s behavior. For example, a citizen who trusts institutions is more likely to pay taxes, comply with COVID-19 rules, and start a business. The PEF helped task team leaders develop context-appropriate solutions for operations. For example, the PEF applied specific political economy filters to unpack challenges to financing the e-procurement reforms. The PEF found that the main barriers to electronic bidding rested in private businesses’ distrust in electronic procedures. As a result, the team amended the operation’s design to advertise the system’s reliable performance. The World Bank also used the PEF when preparing the education PforR. Specifically, the PEF helped team members understand the World Bank’s weak performance in the education sector. It identified performance-limiting issues, such as the World Bank’s strained relationship with the counterpart ministry, high staff turnover within the ministry, and other challenges. As a result, team members put several solutions in place, such as using collaborative leadership, change management, and strategic communication.

Box 4.1. Outcome: The World Bank Group’s Contributions to Climate Change Resilience

  • The World Bank Group supported Morocco in its shift to a low-carbon economy through solar power development. The Bank Group’s policy financing and technical assistance helped eliminate energy subsidies in Morocco, except butane subsidies whose removal—without compensation—would have affected particularly poor households. The Bank Group used its convening power to catalyze the first concentrated solar power project of the Middle East and North Africa Region in Ouarzazate, a $5.6 billion investment program, which was connected to the country’s energy grid in 2016. The Bank Group’s involvement decreased the project’s commercial and technical risks and generated interest from private investors. The Bank Group also strengthened the technical capacities of the government and its implementing agencies—the National Office for Electricity and Drinking Water and the Moroccan Agency for Sustainable Energy. However, the Bank Group has made little progress in changing the regulatory and market conditions to enable smaller-scale renewable energy distribution, which could enhance the uptake of renewable energy for electricity. Partly as a result, Morocco remains dependent on imported coal and gas.
  • The World Bank helped transform Morocco’s approach to managing disaster risk. The World Bank’s analytical work informed the government’s decision to shift from ex post responses to disasters to ex ante prevention of disasters. The World Bank’s 2016 Program-for-Results and 2019 development policy financing with a catastrophe deferred drawdown option helped Morocco operationalize this new integrated approach to disaster risk management. The World Bank cofinanced and provided technical assistance to the National Resilience Fund to help it shift to risk reduction. In January 2020, the World Bank also helped set up a dual system for protecting Moroccan households and businesses from disasters by guaranteeing coverage for the insured and providing basic compensation for the uninsured.
  • The World Bank helped Morocco manage its water scarcity with modern irrigation projects. Morocco’s aridity, growing water demand, climate change exposure, and inadequate solid waste management have contributed to a sharp decline in water availability. The World Bank’s support for modernizing irrigation has increased water productivity, but its impact on surface water was mixed. In the absence of a quota system and individual water meters, the collective conversion of farmers to drip irrigation led to a significant increase in total water consumption. The World Bank’s latest operation is addressing this situation by using geographic information system analytics to help the government adopt tradable water allocation (quota) programs.
  • The World Bank’s support to improve sanitation and water quality in rural areas has largely failed. The World Bank’s operational series on rural sanitation sought to improve wastewater treatment and prevent the raw discharge of sewage into the Oum Er Rbia basin. The World Bank series failed to improve rural sanitation because of the mismanagement of social and environmental safeguards but helped improve wastewater treatment in small and medium-size towns. The project was turned around in the last two years when the World Bank and the government jointly improved safeguard management and systematized compensation.
  • The World Bank’s development policy loan series on solid waste management helped Morocco reduce emissions and improve water quality. These four development policy loans supported the national program for solid waste management. Their contributions to clean water systems, waste collection (from 44 to 96 percent of waste collected), and sanitary waste disposal (from 32 to 53 percent of waste disposed) helped reduce greenhouse gas emissions by up to 1 million tons of carbon dioxide equivalent per year. However, the series was not sufficiently focused on creating a circular economy and lacked investments in waste reduction, recycling, and recovery.

Source: Independent Evaluation Group.

  1. The chapter uses a cross-case comparison of 16 reforms to determine to what extent the World Bank Group built Morocco’s implementation capacity. These include reforms in the justice, energy, financial, education, irrigation, agribusiness, disaster risk management, solid waste management, public administration, business and competitiveness, and accountability and transparency sectors (see box 1.1).
  2. The National Population Registry can be used for all existing registries and programs to ensure identification unicity and veracity and facilitate transaction transparency. In turn, the Unified Social Registry plays the role of a unique entry point for social assistance, allowing programs to estimate per capita household consumption.