Public finances in search of a new governance or how to avoid the collapse of the state

By Taoufiq Boudchiche

The 15th th

international symposium on public finance organized by the Ministry of Economy and Finance and the International Public Finance Foundation addressed the subject of governance of public finance in the context of multiple crises. Crises add up, causing cumulative effects that render the traditional tools of governance obsolete. The challenge, according to Professor Bouvier, is now to avoid the collapse of the State because the entire public financial architecture is threatened by globalized deregulation in a world plagued by permanent and multiple shocks. The recourse to the cycle of indebtedness in response to the economic and social impacts cannot last over time, nor forge a mode of sustainable governance, underlined Minister Jean Arthuis in his speech. Furthermore, the structural transformations undertaken to create room for maneuver in terms of economic growth, competitiveness and new wealth creation come up against the imperative for public finances to respond to economic and social emergencies. This introduces more complexity into the arbitration of decisions between medium and long-term objectives (structural objectives) and the need to permanently erect economic and social shields

in a context of unpredictability. According to Mr. Tawfk Mouline, Director General of IRES, the health crisis confirms that the world has entered a so-called VUCA era (Volatility, Uncertainty, Complexity, Ambiguity) which must lead to adapting the foundations of public and private action. Strategic governance integrating anticipation, forecasting and scenarios taking into account the short, medium and long term is essential.

Indeed, in view of the contexts described, the State and the entire economic and social body are confronted with permanent threats and vulnerabilities and no longer just isolated crises as in the past, he pointed out. In this respect, Mrs. Nadia Fettah underlined, in her speech read by Noureddine Bensouda, the General Treasurer, that the structural transformation policies undertaken by Morocco during the health crisis were immediately confronted with the impacts of climatic crises (drought ) and the disruptions caused by the war in Ukraine (disrupted value chains, imported inflation due to higher commodity prices, food and energy crisis, etc.). She nevertheless welcomed the royal initiative, to engage well before the health crisis, the reflection for the implementation of a new model of development, whose objectives the current government has made its own. Thanks to this initiative, Morocco has a renewed framework for action that contributes to anticipating and mitigating the economic and social impacts of the shocks that occur.

The Minister thus indicated that her department is working to support reforms to bring out a new generation of sectoral plans, encourage investment in innovative sectors in the territories, promote public and private investment in sectors with high added value, promote the development of renewable energies, … New institutional tools are planned such as a new competitive investment charter, a new law on public procurement or the creation of the Mohammed VI investment fund. She also cited the agreement between the government signed with the Office Chérifien des Phosphates (OCP) to devote 130 billion DH to green investments.

In terms of human development, according to her, there is the very important project of social protection and that of the upgrading of health which also constitute a priority like that of education. In this regard, the Minister of Education Chakib Benmoussa highlighted in his speech, the reforms of the sector which are also based on the objectives set out in the new development model such as the generalization of preschool and the introduction of pedagogies more appropriate (teaching learner). This being so, there is clearly, in view of its major structuring programs, the challenge of the financing capacities of this dynamic in a context of fragile public finances. Among the solutions, the Minister mentioned tax reform through a framework law which aims in particular to integrate digital technology. With regard to digital development, the Colloquium devoted a few interventions to it which were highlights, in particular that on the metarverse

by Marie-Alice Bouvier as well as that of Mr. Firdaous. They practically demonstrated on the spot that public finances will experience, due to technological developments in the digital field, an upheaval in the approaches, working methods and means of financial governance at the level of the State, local authorities , companies…New technologies indeed open up still unsuspected horizons in terms of information, precision of knowledge and decision support. For example, big data, geo-location, artificial intelligence, interconnectivity… will be valuable tools for transforming financial decision-making, creating new sources of wealth and income in the virtual world, production and sharing of knowledge… They will also make it possible to meet the need for precise data, for example in the case of Morocco, on the anticipation of climate, water, agricultural crises… to facilitate, anticipate and optimize financial decisions in these areas. In the French case, Benedicte Peyrol, former MP and member of the Finance Committee, presented the progress in France of the public debate on the establishment of a “green budget” intended to respond to climate concerns. Concerning the respective importance of knowledge, that of data and information, they were underlined by several speakers, as being fundamental for a renewed governance. Driss Benhima made this the main focus of his speech, which focused on the territorial decision-making process. According to the former Minister and Wali of Casablanca, the Region must set itself up as a source of territorial intelligence to affirm its leading role in territorial decision-making processes more than the provincial or municipal level. The Region has, he underlined, the institutional and financial means to decide financially and execute projects locally within the framework of regional development plans. But it would still be necessary, according to him, that it appropriates the right tools of “ territorial knowledge and intelligence

», for example, by fully integrating universities and the various local actors in the reflection on local issues and the production of knowledge. Excessive outsourcing of the production of information and knowledge (design offices) weakens the processes of knowledge appropriation. The question of the integration of actors in public decision-making was also the subject of noteworthy interventions, including that of professor and former minister Abdallah Saaff. According to him, public decision-making is an issue whose political and democratic dimension must take precedence over the technocratic mode of decision-making. But the question is not simple because of the technicality of certain subjects. Public finance is one. In this respect, he provided the mixed experiments of countries like Brazil on the experience of the “participatory budget” which mobilized at most 10% of citizen participation. Other reflections and experiments are underway in certain countries such as Denmark to imagine new innovative approaches to public decision-making based on collaborative concepts of decision-making co-construction (methods known as public policy design » experimented by the teams of the MindLab

or the methods of Open Policy Making).

Generally speaking, a consensus emerged on the fact that the issues and challenges of public finances have reached such a level of globality and cross-functionality that it has become necessary to take into account the diversity of actors with sometimes divergent objectives. This, in particular, should lead to a rethinking of fundamental questions such as consent to taxation. It would even be necessary to reflect on new institutions and new legal frameworks to produce public decision-making adapted to the issues of coordination and consistency of the points of view of actors with sometimes divergent objectives.

Finally, a focus was highlighted on the essential question of human resources. Bold strategies for attracting and training talent are necessary due, on the one hand, to a decision-making context that requires “creativity, agility and finesse” in the design and implementation of public governance and, on the other hand, due to technological development and the generalization of digital governance associated with it. *

Economist

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Public finances in search of a new governance or how to avoid the collapse of the state


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