Initial Public Information Document
Report No. 50972
Project Name / Morocco Third Public Administration reform Loan (PARL-III)Region / MENA
Sector / Multi-sector (Macroeconomic and Public Sector Management)
Project ID / P095759
Borrower(s) / Kingdom of Morocco
Implementing Agency / Ministère Délégué auprès du Premier Ministre Chargé des Affaires économiques et générales et de la mise a niveau de l’économie
Date PID Prepared / June 5, 2007
Estimated Date of Appraisal Authorization / February 4, 2008
Estimated Date of Board Approval / May 15, 2008
Background
The Public Administration reform program (PARP) was launched in early 2002. Such a program was based on previous Economic and Sector Work (ESW), including a participatory Public expenditure review in 2001-02, which highlighted major structural constraints to efficient public sector management. The design of the program was supported by the Bank through a programmatic ESW (P-ESW) operation, a multiyear activity through which the Bank is providing the Government with advice, training, and technical assistance as required in the areas of budgetary management, civil service reform, and wage bill containment. During the 2003 Spring meetings, the Government approached the Bank with a request for quick disbursing policy operation to support effective implementation of its program. A first loan was approved by the Bank Board on July 1, 2004 and a second loan was approved by the Bank on March, 23, 2006.
The proposed PARL-III, currently scheduled for presentation to the Board around May 2008, is consistent with the Country Assistance Strategy (CAS) adopted in May 2005, Outcome 1.2: Increase the efficiency of public administration, and with the CAS Progress Report to be submitted to the Board on November 13, 2007. It complements and strengthens the ongoing multiyear Programmatic Economic Sector Work (P-ESW).
Lessons learned from PARL I and II
The PARL-I Completion report underscores that ownership by multiple stakeholders has been and continue to be a key component for the success of the reform program. Reforms requiring inter-ministerial coordination move slowly, thus attention needs to be placed on how to strengthen coordination. The Bank P-ESW program has helped played a key role in helping Morocco prepare and internalize the necessary reforms. It has been instrumental in the program design and in the knowledge transfer suitable to the reform program, as requested per demands.
Loan Objectives
The medium-term objectives of PARL-III are to: (a) improve government efficiency in budget management, (b) improve government efficiency in Human Resources Management, (c) consolidate and control public payroll decrease, and (d) improve public services and simplify procedures through online e-government. The last objective is added to the present operation per the Authorities’ request.
The continuity to a third stage is well justified by steady progress achieved in the implementation of triggers and expected further actions to be agreed with the Bank in the comprehensive matrix of policy reforms of the Public Administration Reform Program (PARP). The proposed loan would be the third in a series of annual programmatic loans supporting implementation of the reform program.
Rationale for Bank Involvement
The Bank has valuable experience in supporting Morocco’s public administration reform. Political constraints have at times prevented the Moroccan administration from achieving a few milestones on time, but in general, Morocco has been a good performer. Previous solid progress now gives the incoming Authorities a unique opportunity to bring continuity under a renewed approach. Not only is responsible fiscal policy the only instrument for preserving macro fundamentals, but public administration reform is the only tool for improving the efficiency of public expenditure, while supporting quality public services and enhancing budget transparency.
Building on PARL-I and II, the move toward a third operation is also justified by past positive performance and the need to consolidate medium-term reforms under a renewed approach suggested by the incoming Authorities.
Benefits and Risks
The main benefit of the loan is to contribute to the improvement of the effectiveness of public resources management in many complementary ways.
There are three risks associated with the program. Implementation risk. As the PARP tools are in the process of being mainstreamed government wide, the two central ministries (Ministry of Finance and Privatization and Ministry of Public Sector Modernization) may well be reaching the limits of their technical supporting capacity to the rest of the Government. This risk will be mitigated through the strengthening of human and financial resources devoted to leading the reform, the rapid conclusion of critical information tools under development, massive in-service training, and closer and more effective mechanisms of inter-ministerial monitoring and dissemination of the Public Administration Reform Program (PARP). Legal risk. Passing of critical laws for consolidating the PARP, like the new Organic Budget Law, or the reforms allowing redeployment of civil servants, may slow the momentum for reform. To mitigate this, the Government expects that gradual and participatory preparation and validation of the draft laws will facilitate the required endorsement from Parliament for passing required legislation. Political risk. Change associated with the ongoing transition to a new government is also a risk for eventual policy shifts. At present, the Authorities believe the level of consensus and appropriation of perceived benefits makes the reforms irreversible, but they still require very close partnership and monitoring to stay on course and recover momentum for implementing future actions in sensitive areas. The risk is mitigated by the political coordination put in place by the new Cabinet to implement reforms.
Implementation Arrangements
The Loan’s administration will be the responsibility of the Ministry of Finance and Privatization (MFP). Coordination and monitoring of the implementation of the reform is supported by the Interministerial Steering Committee for the administrative reform, headed by MFP and the Ministry of Modernization of the Public Sector (MMSP). This Committee was created in early 2003 by a decision of the Prime Minister.
Upon Loan effectiveness, the proposed loan will follow the Bank’s simplified disbursement procedures for development policy operations.
Coordination with Donors
The PARL-I ICR stressed, among lessons for future operations, that donor coordination plays a major role in program success, and the Bank should make great efforts to preserve this unified dialogue. The Bank’s lending operation and the European Commission Structural Adjustment Grants, and in some respects the AfDB support of the Moroccan Government, are based on the same programmatic framework. This has benefited the client by building credibility for the reforms, but also by focusing the attention and expertise from multilateral donors on a complex program of reform. For the Bank and donors it has helped to mitigate the reputational risk of this type of reform and has reduced the supervisory burden on each donor.
At the request of the Government, this third operation is again being prepared jointly with the European Commission and AfDB. Thus, PARLs-I, II, and III will be developed jointly with the EU.
IMF staff is satisfied with the macro framework underlying the proposed operation. An Assessment Letter will be provided to that effect.
Environment category
The PARL has no direct impact on the environment. For the purpose of the Operational Directive 4.01, this project has been placed in the environmental category U, which does not require an environmental assessment.
Contact Points: public InformationCenter
The World Bank
1818 H Street, NW
WashingtonD.C.20433
Telephone No. 202-473-2287
Fax No—202-477-0432
Task Team Leader
José R. Lopez-Calix
Banque Mondiale
7 Rue Ben Arbi Abdellah
Souissi-Rabat, Maroc
Telephone No.212-37-636050
Fax No.212-37-636051
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