Structural imbalances: why trade is not enough to bridge Morocco's regional economic divide

Abstract

This article aims to examine the extent to which trade openness shapes regional economic inequalities in Morocco, a question that remains underexplored in a country characterized by one of the most pronounced spatial divides in North Africa. Analyzing a panel of Morocco's twelve regions (2014-2023) with fixed-effects models, we find that structural factors overwhelmingly dominate regional GDP per capita gaps, reflecting deep and persistent spatial hierarchies. To assess trade's role, we construct a regional trade exposure index that interacts initial regional development levels with national trade shocks. Contemporaneous trade exposure shows no significant association with regional outcomes, while lagged trade exposure, though statistically significant, produces economically modest effects that are dwarfed by the structural range between regions. These findings suggest that in contexts of entrenched spatial inequality, trade liberalization produces heterogeneous regional effects that are delayed, differentiated by initial conditions, and insufficient to drive meaningful redistribution. We conclude that complementary, place-based policies targeting the structural disadvantages of lagging regions are necessary for trade to fulfill its redistributive potential.