Dr. Maghraoui is an associate professor of the practice of political science at Duke University and core faculty in the Duke Islamic Studies Center.
High-level corruption and the capricious behavior of leaders are two of the major sources of popular unrest and discontent in the unfolding Arab Spring. Illicit wealth amassed by autocratic leaders and their families in Tunisia, Egypt, Libya, Yemen, Jordan and Morocco is a common feature of otherwise very diverse regimes. Yet, the phenomenon of high-level corruption in general, and in the Arab world in particular, remains misunderstood and viewed largely through the prism of good governance and institutional capacity. The case of Morocco reveals the fallacy of aiming to fight corruption through good-governance reforms dissociated from the question of political power.
Over the past two decades, a consensus emerged among scholars, international donors and government officials that bad governance is a major source of public-sector corruption in developing countries.1 Research in development economics, and political science in particular, makes a link between institutions, decision-making and the rules of the game, on the one hand, and public-sector performance and development, on the other. Along the same line of argument, major international aid and financial organizations have devoted huge resources to combating corruption through good-governance initiatives.2 Governments elsewhere jumped on the bandwagon. In developing countries, where good governance has for decades been a popular demand, incumbents now eagerly embrace it as a new strategy of development. There is hardly a government in Africa, post-communist Europe or the Middle East that has not implemented one form or another of good-governance reforms. Within just a few years, a long-standing demand to protect citizens from predator states and rulers has become an article of faith among international financial institutions and governing elites. Such a rapid transformation begs for an explanation. What accounts for the global appeal of good governance in centers of power that previously opposed it? How did this transformation come about? If good governance is largely the responsibility of competent public technocrats and institutions, how much room is left for citizens' oversight? What are the implications of this transformation for the broader objective of making government accountable to citizens? Finally, do international aid and financial institutions bear some responsibility by providing assistance to governments that are unaccountable?3
This paper sheds light on key aspects of this transformation based on extensive research on the Moroccan experience. It argues that the concept of good governance advocated by the Moroccan monarchy correlates with the consolidation of a new concept of power that claims political neutrality, values good management and performance, and deprecates partisan politics. Intuitively, it sounds like the perfect way to fight corruption by shielding public service from both illicit social demands and personal gain by unscrupulous politicians. Yet, Morocco's corruption problem has worsened over the past decade. As the ruling monarchy expropriated the concept of good governance, petty corruption in the public sector increased, and high corruption reached unprecedented proportions. The persistence of corruption in Morocco, I argue, is not simply a problem of discrepancy between tactical promises and actual practices, nor is it a problem of unrealistic expectations about what good governance can do. The case of Morocco — a country that Western allies and international donors consider a model for reform4 — reveals an unforeseen, perverse connection between "good governance" and unchecked power. The technocratic, apolitical notion of good governance championed by the World Bank and other international aid organizations has, in fact, made high-level corruption associated with the Moroccan monarchy totally legal and almost legitimate.
This paper is divided into four main sections. The first exposes the convergence between the concept of good governance and the monarchical conception of power and politics. The second provides a general survey of the problem of corruption and its amplification under the rule of King Mohamed VI. The third examines the series of reforms the government undertook to combat corruption. (I distinguish between two qualitatively different periods of reform to illustrate the difference between tactical liberalization and official commitment to fighting corruption.) The last section explains the apparent paradox between the monarchy's commitment to "good governance" and its predatory behavior in the economic sphere.5
GOOD GOVERNANCE AND POWER POLITICS
Strong empirical evidence supports the connection between corruption and the lack of good governance. Opportunities for corruption are greater where there is a lack of institutional transparency, accountability, capability, effectiveness, fairness and access.6 Where corruption is endemic, the tasks of improving performance are more difficult.7 Beyond this, scholars, professionals and policy makers disagree on the causal relationship between corruption and good governance and put emphasis on different components of the latter.8 Still, there is an implicit or explicit consensus on two characteristics that seem to improve good governance: the "technocratic condition" and the "political-neutrality assumption."
The technocratic condition refers to the management skills and institutional capacities that countries in transition to democracies or market economies need in order to establish fair, viable and responsive public institutions. The quality of rules, procedures and regulations governing public institutions is crucial for supporting economic growth and development, consolidating the newly established political systems, and insuring the delivery of basic services to citizens. The technocratic condition may be understood more broadly to include the justice system; the constitutional framework; formal laws that govern relations between individuals, firms, civil society and the state; as well as the codes and principles that structure relations of exchange and economic activity in general. According to this view, the professional quality of institutions, more than anything else, accounts for the difference between countries that succeed politically and economically and those that do not. Hence, corruption is primarily a problem of institutional malfunction that can be addressed through technical measures.
The state-neutrality assumption refers simply to the important role of public institutions and the state in the functioning of markets and democracies, independently of existing relations of power. The association of good governance with state neutrality was in large part a backlash against excessive deregulation and the methodical transfer of services normally delivered by the state to the private sector. But rather than rehabilitating the role of the state in development, the concept of good governance aims to apply to the public sector the management methods of the firm. In other words, the state could be run efficiently like a successful firm, if only it were shielded from political influence.
But a concept of good governance grounded in a technocratic, politically neutral view of power can be detrimental to accountability and oversight. It is not hard to see why such a conception is ineffective when it comes to fighting corruption. Good governance claims to provide the techniques of policing and improving institutional performance with minimal interference in a country's political system. This is unrealistic in a context in which senior government officials are not held accountable to a body that has oversight, authority and the power of enforcement.
Advocates of good governance as a tool to fight corruption are not oblivious to the political context. Some are aware of how informal institutions and clientelism often interfere with and neutralize formal institutions. Others insist on the important role of independent anti-corruption watchdogs and civil society in general. And most catalogue a number of political pre-conditions such as political representation, separation of powers, an independent judiciary and adequate constitutional mechanisms to effectively control corruption. Still, much of the research and many of the international programs focus on formal institutions and accountable governance, not on citizen oversight. In fact, there is a great deal of skepticism as to whether free elections, political representation or citizen participation can actually control corruption, due to complexity, layers of decision making and the general temptation to cut corners.
Hence, the main claim here is that a technical approach to good governance has failed to reduce corruption in Morocco because it is disconnected from the reality of power relations. The problem of corruption in Morocco cannot be addressed independently from the political environment. The monarchy's executive and economic networks are extensive entitlements that overlap with the state and the market and cannot be regulated without breaching a law, a norm or an unwritten rule. Moreover, the behavior of agents within these networks may not even qualify as corruption, narrowly defined, because these networks also provide political stability, generate domestic and foreign investments, and fund social programs. 9 As conceived and implemented currently, the technical approach to good governance is not only insufficient as an anti-corruption strategy; it also masks the roots of the problem.
The monarchy's embrace of the World Bank's "politically neutral" conception of good governance is not fortuitous: the claim that it can improve governance has added a modern managerial function to the monarchy's already extensive historical dominance. Prior to European colonization, the sultan's prerogatives were grounded in local customs and religious heritage, but limited in practice by an intricate balance of power between the Makhzan (traditional site of a wandering court) and independent tribes, religious scholars, judges and urban merchant families.10 During the colonial period (1912-55), the balance of power began to shift in the sultan's favor as France provided the military capabilities, human and material resources, and administrative institutions to centralize authority.11 After independence, the monarchy's dominance was institutionalized, as King Hassan II effectively defeated the nationalist forces vying for a prominent role in the decision-making process (1962-83).12 Corruption was a major component of King Hassan's strategy.13 In recent decades, the monarchy found a new and potent rationality to expand its prerogatives: the modern necessities of efficient government to confront the challenges of social and economic development (1983-2009). The technocratic nature of the successive governments that led Morocco during this period illustrates the monarchy's drive to explain away Morocco's economic and social problems as mismanagement problems, not accountability, checks and balances, or distribution of powers. 14 Herein lies the paradox of good governance as a strategy for fighting corruption in the Moroccan context. Because a reshuffling of the structures of power generally entails risks, uncertainties and inefficiencies, "good governance" trumps political change. Yet, precisely because there is no system of checks and balances, the king's extensive powers limit the potential benefits of the very measures he asks his government to implement.
The monarchy's political supremacy and encroachment on the economic sphere expose the limits of approaching corruption and good governance as management problems. The monarchy's self-proclaimed "executive" vocation means that the king's sovereign domains are multiple, extensive, indistinguishable from those of the state, and not subject to normal regulations and procedures.15 Furthermore, the king's vast patronage networks in the economic sphere and the state apparatus set the norms of civic behavior for influential political and economic actors. The trickle-down effect of this political culture should not be underestimated: Corruption has become "normalized" across the political, economic and social sectors.16 Hence, despite Morocco's implementation of technical reforms to improve good governance since 1998, corruption remains endemic.
THE CORRUPTION PROBLEM
Despite great improvements in the techniques of measuring corruption over the past decade, there is no consensus on the most appropriate tools and indicators to assess its scale and scope.17 In Morocco, "endemic" is commonly used to describe corruption in the independent press, local NGOs and international organizations. Petty and grand corruption seem to permeate every aspect of life: politics, business, the central administration, local government, public services and the judicial system.18 While lacking precision, the "endemic" attribute is nonetheless based on different qualitative and quantitative sources: specialized business assessments, qualitative evaluations of key social sectors, and people's opinion and experience with corruption in everyday life. These sources correspond to Transparency International's three main annual reports on corruption across the globe.
The Corruption Perceptions Index (CPI)
Morocco's annual CPI scores and rankings are drawn from several surveys of business experts: The Association of Futures Brokers and Dealers (AFBD)'s Country Policy and Institutional Assessment; Bertelsmann Transformation Index; the Economist Intelligence Unit; the Merchant International Group; Global Insights (formerly The World Markets Research Center) and the Global Competitiveness Report of the World Economic Forum. Morocco's standing on Transparency International's Corruption Perception Index deteriorated significantly between 1999 and 2008. After an improvement in 1999 and 2000, Morocco's CPI score went down to 3.5 in 2008, even as more countries with poor corruption records or lower incomes were added to the survey (Afghanistan, Cambodia, Haiti, Iraq, Liberia, Myanmar, Sierra Leone, Somalia and Sudan).
Even within the Arab world, Morocco's corruption standing is unimpressive given the country's older record of structural and liberalization reforms (1983). In 2006, Morocco ranked eleventh out of 17 Arab countries. In 2007, it lagged behind Qatar, the UAE, Bahrain, Oman, Jordan, Kuwait and Tunisia. In 2008, it ranked eighth out of 15 Arab countries, five of which scored significantly higher than Morocco (above 5).
The Global Corruption Report (GCR)
Another indicator of Morocco's deteriorating standing is the GCR. Unlike the CPI, the GCR is based on qualitative assessments of sectors vital to the general public across the world. Since the launching of the GCR series in 2001, Morocco was included in the 2006 "Corruption and Health" report and the 2007 "Corruption and Judicial Systems" report.
The 2006 and 2007 reports highlight the connection between royal powers and corruption in the justice system. One investigation examines how the king's presiding over the Supreme Council of the Magistracy (CSM), Morocco's highest judicial body, undermines the administration of justice. As head of the CSM, the king appoints all judges and prosecutors and nominates the minister of justice, who is considered a royal "sovereign minister." A prosecution for corruption involving public funds cannot proceed without a written order from the minister of justice. A case illustrating the king's domination of the justice system involved the judicial mishandling of the embezzlement of billions of dollars from public funds by senior officials.19 Another investigation exposed the limits of the government auditing office, the Inspection Générale de Finances (IGF), when it comes to probing embezzlement by individuals closely associated with the monarchy. Investigations of a half dozen gross financial frauds involving Morocco's top public companies in banking, social security, transport, agricultural credits, public housing and international aid projects did not lead to the prosecution of the chief culprits.20 While the press reported widely on these "financial scandals," auditing and special court procedures led nowhere. The Palace clearly wanted to move on and "wipe the slate clean" for a new beginning.21
In the 2006 report, a survey of 1,000 Moroccan households on their experience with the public health system reveals the following: four out of five people interviewed described corruption in the health system as "common to very common." Forty percent of people interviewed admitted to making under-the-table payments in exchange of services or supplies that were supposed to be free. Eighty-five percent of people who paid a bribe in order to be examined or admitted were entitled by law to health-care services. According to Morocco's minister of public health, corruption in the public health system penalizes mainly the poor: 55 percent of the people who benefit have the means to pay, while 15 percent of the country's poorest are paying out of their pockets. 22 The 2006 GCR substantiates the endemic nature of corruption in a vital sector in Morocco. Similar problems exist in public education, public housing, law enforcement, political institutions and public administration, from the delivery of birth certificates to burial permits.23
The Global Barometer of Corruption (GBC)
The GBC is based on worldwide public opinion surveys of household views and experiences of corruption. Rather than compiling business indexes or evaluating the performance of vital sectors, the GBC's main purpose is to track how corruption affects the daily life of ordinary individuals and households. Morocco was included in the 2006 and 2009 GBC public-opinion surveys of corruption. The 2006 report showed that 60 percent of Moroccan respondents said they have paid a bribe in the 12 months preceding the survey. Morocco had the second-highest "people-bribery experience" among the 62 low-, middle-, and high-income countries surveyed (Albania, 66 percent; Cameroon, 57 percent; and Gabon, 41 percent). The 2009 report shows no improvements in Moroccan public opinion. More than 64 percent of respondents said they had taken a bribe in the 12 months preceding the survey.24 On a scale of 1 to 5 (1 indicating "not at all corrupt," 5 indicating "extremely corrupt"), respondents considered corruption very high in the police (4.2), public administration (4.1 and 4.6), the justice system (4.0 and 4.1) and public health (4.0).
In 2008, Transparency Maroc's annual press report summarized Morocco's slow progress in fighting corruption under the heading "Morocco 2008: More Corruption, Less Transparency!" The report documented continuing cases of corruption in the judiciary, the public-service sector, banking and real estate.25 The same year, the European Commission issued a harsh report on widespread corruption and nepotism and the lack of transparency in Morocco's public-service sector.26 Finally, Morocco's own Cour des Comptes, headed by Ahmed El-Midaoui, former minister of the well-informed and powerful Department of the Interior, released an unusually critical report on nepotism, corruption and mismanagement in 11 public companies.27
In sum, a strong correlation exists between the assessments of business experts (CPI), the evaluation of key social sectors (GCR), and public opinion and experiences (GBC) regarding corruption in Morocco during the last decade. Recent separate reports corroborate the trend.
Morocco's anti-corruption efforts since independence can be divided into two distinct phases. The first includes the sporadic campaigns of 1964, 1971 and 1995-96 pressed by King Hassan II (1962-99). Although these campaigns were useful in that they exposed the magnitude and range of corruption in Morocco, they carry the familiar political and administrative trappings of failed anti-corruption efforts in developing countries. The 1995-96 "sanitation campaign," for example, singled out second-tier public officials and independent entrepreneurs for undermining Morocco's economic liberalization efforts, muddying the country's international economic standing and depriving the national treasury of revenues through black-market activities and tax evasion. 28 Yet, the monarchy's close partners and associates, not subject to normal procedures and regulations, were spared the investigations. Further, the Special Court of Justice (SCJ), notorious for its political subordination, expedient procedures and stiff penalties, handled the investigations and indictments. Because of their dubious political motivations and obvious procedural flaws, these campaigns are not very relevant to gauging the effectiveness of good governance as a strategy to reduce corruption.
The second category of anti-corruption efforts is the series of administrative, legal and institutional reforms launched under King Hassan II in 1998 and expanded under King Mohammed VI (since 1999). These reforms are worth noting for two reasons. First, they were implemented after Morocco had already taken several steps that international donors consider crucial to reducing the motivations, opportunities and mechanisms of corruption. The reforms and measures include a structural adjustment program (1983-93); a restructuring, or mise a niveau, of public and private firms (1993-98); the signing of an association agreement with the European Union (1996); the relaxation of labor-market policies (1990s); concrete steps to diagnose the country's administrative dysfunctions (World Bank 1994 and 1998, PNUD 1996, USAID 1998); and the establishment of special commercial courts to hear trade disputes (1997).
Second, the post-1996 anti-corruption efforts took place in a positive ethical and political environment. A full range of political reforms, especially in the area of human rights, freedom of expression and civil-society advocacy, were already in place (1991-98). Equally important, the efforts involved multiple political partners, independent entrepreneurs and civil-society actors. Last, the objective of the reforms was to fight corruption by strengthening "good governance," not to persecute political and economic rivals. In sum, these efforts mark a clear departure from the widely discredited "sanitation campaign."
Successive Moroccan governments since 1998 have made "good governance" a cornerstone of their anti-corruption strategy. The appointment in 1989 of the well-respected socialist Abderrahmane Youssoufi as prime minister was a turning point. The Youssoufi government (1998-2002) developed a "moral" anti-corruption strategy based on three major pillars: reform of the public civil sector, reform of the procedures for awarding public contracts, and the reactivation of judicial and legislative investigations. The governments of Driss Jettou (2002-07) and Abbas El Fassi (2007-11) have pursued a technocratic-oriented anti-corruption strategy, but neither was willing or able to put power relations clearly into the equation.
The Youssoufi government made the "moralization of public life" to combat corruption a top priority. The centerpiece of this effort was the elaboration and implementation of the "Pacte de bonne gestion," an ethical guide for public-service employees.29 The guide was the outcome of a 1998 national workshop on corruption that sought inputs from academics, NGOs, and representatives of public administration, the judiciary, and independent entrepreneurs. The Ministry of Public Service Reform (MMSP), directly attached to the prime minister's office, dispatched the three-page document in March 1999 to every local and national government office. The guide requires all public officials to respect administrative rules and procedures in the delivery of services and to keep transparent documentation in the management of budgets and resources. To enforce these guidelines, the government ratified a law in 1999 that makes public officials personally and legally accountable for misconduct. To show high-level commitment to the reforms, the king established the Diwan al-Madalim in 2001, an ombudsman to settle human-rights or administrative disputes between citizens and public authorities. In 2002, the government ratified another law that compels public officials to justify their procedures and decisions when contested by citizens.30
A second centerpiece of the Youssoufi government was the reform of the procedures for awarding public contracts. The opacity that characterized the granting of public contracts was a major source of corruption and a point of contention between the administration and the General Confederation of Moroccan Entrepreneurs (CGEM). In 1999, the government promulgated a new decree that sets conditions for the open, competitive award of pubic contracts.31 The conditions include transparency (precise criteria in the selection process, suppression of direct concession, clarification of procedures, etc.), better dissemination of information and competition on the basis of technical merit.
A third facet of the Youssoufi government's anti-corruption drive was to shake up the judiciary system, notorious for its endemic corruption and subordination to political power. Between 1998 and 2002, a number of judicial and legislative inquiries took place. The Ministry of Justice, led by the well-respected Omar Aziman, investigated 129 judges and documented a total of 10,202 cases of petty corruption. Also investigated were 433 prison guards and 423 lawyers. Some 20 magistrates were temporarily suspended or disbarred. Most prominent cases of corruption in the judiciary system are related to drug trafficking in Northern Morocco. In 2000, the government signed and ratified the UN Convention Against Transnational Organized Crime. Also under the Youssoufi government, the Moroccan parliament, for the first time, set up a fact-finding commission to probe financial fraud in the Credit Immobilier et Hotelier. And the Judicial Police launched its investigation of cases of gross embezzlement in public companies.32
In 2004, the government abolished the Special Court of Justice (SCJ), subservient to the minister of justice, and replaced it with five courts of appeal. The criminal divisions of these courts would handle serious cases of fraud involving public funds. Small offenses of corruption by public officials would fall under the jurisdiction of the courts involving first instance. The government also reformed the Criminal Code to stiffen penalties of corrupt officials. The purpose of these reforms was to free corruption proceedings from the executive. Previously, the SCJ, which handles cases of public fraud, could not initiate an investigation without the written consent of the minister of justice.33
In 2005, the government announced a six-point plan to fight corruption. The plan contains a law to require the disclosure of assets by all senior officials, including members of the parliament; a law to address money laundering; a decree to establish an office to track down known corruption cases; and enforcement of the state auditing mechanisms, financial transactions and public-contract procurements. Although it took two years to follow up on the plan, the government began to implement important measures in 2007.34
• The government ratified the UN Convention against Corruption. The convention constitutes a major step in the implementation of the banks' internal procedures to control money laundering, improve financial transactions, limit cash infusion into accounts and verify customers' identification.
• The same year, the parliament adopted laws requiring senior officials, including deputies, judges and local and national civil servants, to declare their personal assets, as well as the assets of their spouses and children, at different intervals while in positions of public responsibility. The parliament passed a law that prohibits the use of the financial system for criminal purposes and the transfer of funds stemming from illicit sources. The law punishes offenders with prison sentences and large fines. In addition, a new financial investigation unit answering to the office of the prime minister was established, with a mandate to receive, analyze and disseminate information on suspicious transactions and collect data on money-laundering operations.
• The government enacted a decree on public procurement that increases the time allowed for the submission of large bids, requires online publication of all call for bids notices and bidding-process results, and to some extent establishes the preeminence of quality over price for consultants' contracts. However, some crucial points remain to be addressed, such as the establishment of an efficient and independent mechanism for alternative dispute resolution.35
In 2008, the government established l'Instance Centrale de Prévention de la Corruption (ICPC), a central body for the prevention of corruption. The ICPC is a consultative institution, but its mandate, philosophy and purview seem to blend Youssoufi's "moral" approach and his successors' technocratic approach. It is too early to tell whether ICPC can make a difference without confronting the monarchy's powers.
To conclude, the Moroccan government's anti-corruption measures since 1998 reflect an awareness of the gravity of the problem and a commitment to take concrete steps to confront it. This is a far cry from the political hesitations and manipulations of earlier campaigns. Yet, the problem of corruption keeps worsening.
Why are the decade-old efforts not working? There is no doubt that part of the explanation lies in governance issues. First, there is the problem of the judicial system. It lacks independence, the judges are corrupt, and the entire body lacks the training and capacity to handle the increasingly technical issues related to financial fraud, auditing and money laundering. Second, the bureaucracy seems immune to anti-corruption measures because of problems of coordination, measurement, enforcement and universal application. Third, there are problems with the auditing bodies. Fourth, there is a general gap between reforms and application. Finally, there is the lack of a coherent strategy.
These are not simply technical challenges that can be addressed by streamlining the process of delivering public services to the citizens. They are profoundly political problems. While there is little doubt that good governance is key to fighting corruption, it is not clear that good governance, and hence transparency and the rule of law, can be achieved through technical measures alone. The explicit connection between endemic corruption in Morocco and the nature of power relations is now widely accepted and documented.36
THE MONARCHY'S ROLE
Formal control: The monarchy's formal religious, executive, legislative and judiciary powers have been sanctified in successive Moroccan constitutions since independence. The king is amir al-mouminin (commander of the faithful), the supreme representative of the nation and the symbol of its unity. And he is the head of the state.
• As commander of the faithful, a divinely ordained spiritual leader and the representative of God on earth (officially, khlaifat Allah fi ardih), his persona is "sacred and inviolable."
• As a symbol of the nation and its unity, he is above all other actors (the "chief arbitrator"); he cannot be the subject of a plebiscite; and he is above the law (royal speeches, public pronouncements and recommendations have statutory power — royal dahirs).
• As head of state, the king's prerogatives are multiple and extensive. For example, the king effectively appoints the prime minister, senior military and security officers, governors (cities), walis (regions), the head of the national treasury (wali Bank al-Maghrib), the chairman of the Constitutional Council, the president of the High Court of Justice, the magistrates, the general secretaries and general directors in every ministry, and the heads of publicly owned companies. He presides over all councils (constitutional, magistracy, education, planning, etc.). The king's addresses to the parliament cannot be rebutted or debated. He can dissolve the two houses of parliament by royal decree (after some consultation and a speech to the nation).
None of these formal powers was diluted under Mohammed VI, not even after the July 2011 constitutional reform that was supposed to limit his prerogatives and give the parliament and the government more independence from the palace. Any public criticism of the king or his policies is legally punishable. In fact, as recent Human Rights Watch reports indicate, the number of people sentenced to jail for violating "red lines" is increasing.37 The old loyal political elites or their younger descendants still dominate whatever political fields and spoils are left for them. This arrangement mutes any meaningful political debate or formal opposition. Under the current Islamist-dominated parliament and government, the proportionally huge royal budget is still passed without discussion, except for self-serving complaints that the king's activities actually require larger funds. And the same Ministry of the Interior that the monarchy controls as a "sovereignty cabinet" cooked up the July constitutional referendum and the November 2011 legislative elections, as it has done for the past 40 years.38
The continuity of the monarchy's monopoly of power under the young king is not surprising. In successive speeches since coming to the throne, Mohammed VI has made it clear that he intended to exercise the full powers he inherited from his father and those granted to him by the constitution (royal speech, August 1999). Moreover, the king's informal powers increased significantly as the formal political process (the elections, the parliament and the government) became even less relevant as the legal opposition all but disappeared. Like his father, he disdains political parties and the electoral process (royal speech, July 30, 2002) and takes his case directly to the masses, who are deeply skeptical about the formal political process. Hence, the centrality of the concept of "executive monarchy" that combines formal authority and informal powers. The concept became the guiding principle of Moroccan politics. No significant political action, economic project or social program can take place in Morocco without the king's initiative or blessing. In theory as in practice, "The monarchic regime that [the king] wanted is that of an executive monarchy that cannot be reduced to a specific concept or limited powers, whether executive, legislative, or judiciary" (royal speech, July 30, 2007).
Informal control: As widespread corruption, popular boycott and political irrelevance continue to stain the formal political process, the king's informal political networks have entrenched their control over the major decisions that shape the country's direction. "Good governance" and the delivery of decent public services to citizens through the so-called "politics of proximity" (de-concentration and decentralization) are central to the takeover. The monarchy's informal control is a complex, multi-layered process. But it boils down to creating a parallel structure of decision making consisting of close associates of the king (old schoolmates, special advisers, business partners, technocrats, managers of royal holdings, heads of "ministries of sovereignty," and frequently former opposition figures and current heads of political parties) who can trump or influence governmental decisions if they seem to interfere with the king's directives. The network is much wider than the Royal Cabinet; it includes the heads of numerous royal commissions, royal social funds, infrastructure projects, and appointed officials at the local, provincial and regional levels. One indication of the entrenchment of royal networks is that several ministers of the current governmental coalition were actually selected by the Royal Cabinet for their technocratic competence and "parachuted" into the majority parties. In principle, the party that emerges with the most votes negotiates a government coalition with other partners. Following the 2007 legislative elections, Prime Minister Abbas El Fassi of the Istiqlal party declared openly, with no ambiguity or hesitation, that the king issued specific instructions directing who should be included in the government and that he implemented those royal instructions.
As the recent appointments of some 20 senior public officials illustrates — the first such appointments since the new constitution was passed — the powerful Ministry of the Interior informally provided the list of the officials to Prime Minister Benkiran to be formally nominated. It was the king, however, who appointed them. The monarchy has many such informal networks to get around even the limited formal concessions made to the government and the parliament.
"Moroccanization:" This refers to the forced transfer of foreign majority holdings in companies to Moroccan hands. Rather than a nationalization drive, the 1973 Moroccanization law restricted foreign ownership of certain industrial, commercial and service entities to no more than 49 percent and called for the appointment of all-Moroccan boards of directors. The law was a major economic blunder; it frightened away foreign capital and was reversed 20 years later. But it was a crucial first step in the monarchy's foray into business. It allowed the king and a small number of prominent, wealthy families to establish monopolies over key sectors of the economy.
The king's business associates were mainly commercial families from the city of Fez who were historically connected with Moroccan sultans. Often these families had more business experience than the royal family. Thanks to credit facilities, preferential loans, tax relief and all sorts of protections, the king and his associates came to dominate key sectors in the economy, especially the textiles and clothing industry, food processing, manufacturing, banking, insurance, tourism and agriculture. Some of the major private royal holdings, such as Omnium Nord Africain (ONA) and its branches in agri-business, sugar production, fishing and real estate, continue to dominate economic life.
Second phase of encroachment: The second phase of royal encroachment on the economy took place during the wave of privatizations that began in the 1990s. By 1990, there were some 650 public companies, either inherited from the French protectorate or created after independence. However, many of the companies that were supposed to be the main engines of the Moroccan economy became, according to several private and public reports, a financial burden on the state treasury. In 1984, for example, public companies started to absorb about 10 percent of the state budget.
But the liberalization reforms and privatization program were not driven by outside forces alone. They had strong local supporters, including King Hassan, who on several occasions called for changing the rules of the game to allow a new generation of young entrepreneurs to emerge and give a spark to the economy. Since King Mohamed VI came to power in 1999, the central administration has begun to promote the so-called "nouveau concepte de l'autorité." These efforts cannot be dismissed as just slogans; they reflected efforts to adjust to profound socioeconomic transformations. In at least one important respect, the reforms were a success. By the mid 1990s, a new and independent entrepreneurial class emerged in Morocco, exactly the dynamic economic elite that King Hassan called for in the early ‘80s.
This new breed of entrepreneur is different from the old influential families that had dominated the Moroccan economy since independence, especially after the Moroccanization Law of 1973. The new entrepreneurs, concentrated mainly in small and middle-size firms, distinguish themselves from the old guard by advocating transparency and professionalism, and the suspension of privileges and illegal dealing.
As the new entrepreneurs became a distinct group with coherent interests, they formed or joined the Confédération Général des Entreprises du Maroc. Through the confederation, they lobby the government for reforms, negotiate with labor and the state, and build wide civil-society support for the rule of law.
To sum up, the monarchy's domination of the economic sphere through unchecked or non-transparent deals and its simultaneous commitment to expand the horizon of modern, independent economic elites requires an explanation.
When the topic of privatization was put forward in 1990, there was very little ideological opposition to it in principle. Much of the debates in 1990 centered instead on the modalities and transparency of privatization. In the media, the parliament, the royal palace, the central administration, the government, business circles and civil society, the predominant themes were the birth of a new business culture, transparency and a new breed of responsible entrepreneurs, "entrepreneurs citoyens." In other words, the privatization drive looked like the outcome of a domestic maturation process, not a program imposed from outside that Moroccans had to fake implementing.
The sales process was, in principle, carried out by a tripartite organizational structure made up of a minister, a commission of high government officials, and a price-setting board. Sales were done through stock-market listings, tenders, concessions and sometimes workers' shares. Sales of large industrial or financial firms often combined different methods.39
All in all, the privatization program looks like a success: by 2006, proceeds from the 114 companies that were privatized had reached approximately $11 billion. Yet, despite all the legislative and administrative provisions, three features stand out. The great majority of acquisitions secured by foreign companies were done through tenders. Most transfers involving domestic companies were done either through concession — "attribution directe" — or through listing on the Casablanca Stock Exchange. The royal holding company Omnium Nord Africain and its affiliates acquired the major and most profitable public companies. This allowed the royal family to deepen and expand its control across key sectors of the economy, including agribusiness, finance, insurance, real estate, telecommunications and technology.
The involvement of the monarchy in the economic sphere became so conspicuous that the independent media began to use the term "Alaouization," playing on the name of the royal family to describe as the latest stage of economic transformation, after "Moroccanization" and privatization. This economic takeover conflicts with Morocco's stated commitment to economic and administrative reform, particularly with the effort to create a new and modern entrepreneurial class that can inject a fresh dynamism into the economy and create job opportunities.
The king's fortunes: A Forbes 2009 Special Report, The World's Richest Royals, includes the following:
Most royals may have to be a bit thriftier this year as fortunes plummet, but it's not so for the King of Morocco, Mohammed VI, whose 12 palaces reportedly cost $1 million a day to operate. His net worth is up $1 billion this year to $2.5 billion, making him the only one of the world's 15 richest royals to have added to his fortune in the past year.40
According to the magazine, the king earned his seventh-placed ranking thanks to a surge in the price of phosphates, nearly half of world reserves of which are located in Morocco. But phosphate revenues are not the king's only source of wealth. The royal group Omnium Nord-Africain, a financial and industrial conglomerate, dominates key sectors of the economy through its "subsidiaries," Société Nationale d'Investissement and Siger. The combined value of royal holdings in finance, mining, telecommunications, real estate, energy, construction, commercial distribution and agribusiness constitute 30 percent of Casablanca's stock exchange. Much of this fortune has been built in a non-transparent environment since Mohammed VI came to power.41
In Morocco, the problem of corruption is intertwined with the political environment. During the past decade, the hold of the monarchy on the political and economic spheres — already strong since the 1970s — has become even more entrenched and sophisticated. "Good governance" provided a political rationale for completing its domination over the formal political process and modern economic sector. This is a particularly challenging problem; the monarchy is not just another political and economic actor that can be reined in through institutional capacity building. Moreover, the monarchy is a producer of political and economic norms that other important actors emulate and exploit.
Morocco's failing anti-corruption experiment raises crucial theoretical and practical questions regarding the World Bank's current approach to reduce corruption and improve the delivery of services to citizens. It challenges some of the major explanations of why anti-corruption measures often fail in developing countries. The problem of corruption worsened even as successive governments intensified efforts to curtail it. These efforts include a political commitment at the highest levels; public-awareness campaigns through the independent media and civil society; the establishment of specialized bodies to hear corruption complaints; institutional policing and oversight; highly publicized executive reprimands; various administrative reforms and anti-corruption laws; and coordination with significant, independent and organized entrepreneurial groups. Moreover, the government often solicits the expertise and assistance of international organizations to address the problem of corruption and governance. In sum, Morocco's failure cannot be explained away simply as a problem of political will, institutional incapacity or weak civil society.
Because Morocco is considered a "student model" of the World Bank's reform programs, its failed experiment also raises some pertinent questions about the bank's own "good governance" strategy.42 First, is the World Bank's economic or market model to achieve good governance and reduce corruption the right one? In other words, can technical measures to improve the quality and competitiveness of a product or service apply to a problem rooted in the political culture and norms that sustain power relations? Second, if the problem of corruption is embedded in power relations, is the World Bank's "no political interference" policy realistic? Can the World Bank overlook the nature of power relations and hope to achieve economic development and reduce social problems by working through apolitical technocratic elites? Third, how does the strategy of increasing the cost and diminishing the benefit of corruption work when, in the first place, political and economic survival depends on partaking in the system of power that breeds corruption? Finally, in connection with the wave of popular protests that have already toppled three authoritarian Arab regimes, it is time to call into question the idea of top-down-driven reforms, whether to curtail corruption, negotiate democratic pacts or liberalize traditional societies.
1 Oliver Williamson, "The Institutions and Governance of Economic Development and Reform," Proceedings of the World Bank Annual Conference on Development Economics: 1994 (Washington, DC: World Bank, 1995); "Helping Countries Combat Corruption: The Role of the World Bank," Poverty Reduction and Economic Management (Washington, DC: World Bank, September 1997); "The IMF's Approach to Promoting Good Governance and Combating Corruption – A Guide," International Monetary Fund, June 20, 2005, http://www.imf.org/external/np/gov/guide/eng/index.htm; Management Development and Governance Division, Bureau of Policy and Program Support, "Corruption and Good Governance Discussion Paper 3," United Nations Development Program, July 1997, www.undp.org/governance/docs/AC_Pub_corruption-goodgov.pdf; "1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions," Organization for Economic Co-operation and Development, 2011, www.oecd.org/dataoecd/4/18/38028044.pdf.
2 These include the World Bank, International Monetary Fund, United Nations Development Program (UNDP), United States Agency for International Development (USAID), and Organization for Economic Co-operation and Development (OECD). During the last two decades, UNDP alone produced 39,900 documents related to "good governance." In 2008, the World Bank spent US$4.7 billion for public sector reforms and the rule of law, which represents 18.8 percent of the Bank's total lending.
3 Throughout this paper, "good governance" is associated with institutional performance, efficiency, and responsiveness to basic public services, whereas "accountable governance" implies some level of ruler accountability to the ruled through a system of checks on power.
4 Haim Malka and Jon B. Alterman, Arab Reform and Foreign Aid: Lessons from Morocco (Center for Strategic and International Studies, 2006).
5 Catherine Graciet and Eric Laurent, Le Roi prédateur: main basse sur le Maroc (Editions du Seuil, 2012).
6 The empirical literature on this connection is vast and covers both in-depth case studies and large-N studies. For a middle range, see for example Goran Hyden et al., Making Sense of Government: Empirical Evidence from Sixteen Countries (Lynne Rienner, 2004).
7 Transparency International's annual reports consistently show that the most corrupt countries are those that lack government institutional capacity (Haiti, Iraq, Chad, Sudan…). See the organization's annual reports: Corruption Perceptions Index (since 1995), Global Corruption Report (since 2001), and Bribery Payers Index (since 1999).
8 Daniel Kaufmann and Aart Kraay, "Growth without Governance," World Bank (2002); Daniel Kaufmann, "Rethinking Governance: Empirical Lessons Challenge Orthodoxy," World Bank (2003).
9 Defenders of the monarchy's executive, legislative, and judiciary supremacy advance two arguments: the popularity of the monarchy and the incompetence of the government and elected officials. Even if these claims are correct, the monarchy's unchecked powers still breed corruption and incompetent/greedy officials.
10 Mohamed Aziz Lahbabi, Le gouvernement marocain a l'aube du XXe siècle (Casablanca: Editions Maghrebines, 1975).
11 Mohamed Salahdine, Maroc: tribus, Makhzen et colons, essai d'histoire économique et sociale (L'Harmattan, 2000).
12 H. Munson, Jr., Religion and Power in Morocco (Yale University Press, 1993).
13 John Waterbury, The Commander of the Faithful (Columbia University Press, 1982).
14 See Abdeslam Maghraoui, "De-politicization in Morocco," The Journal of Democracy 13, no. 4, (October 2002): 24-32; Abdeslam Maghraoui, "Political Authority in Crisis: Mohammed VI's Morocco," Middle East Report, no. 218 (Spring 2001): 12-17.
15 Anouar Boukhars, Politics in Morocco: Executive Monarchy and Enlightened Authoritarianism (Routledge, 2010).
16 "Normalized" in the sense that that people who engage in corruption don't believe their behavior compromises their social status or moral integrity. See Waterbury, The Commander of the Faithful; John Waterbury, "Endemic and Planned Corruption in a Monarchical System," World Politics 25, no. 4 (July 1973): 533-55; Najib Bouderbala, "La lutte contre la corruption," United Nations Development Programme, 1999, http://www.rdh50.ma/fr/pdf/contributions/GT10-5.pdf.
17 See Raymond June et al., A User Guide's to Measure Corruption (United Nations Development Programme, 2008).
18 See Association marocaine des sciences economiques, "La corruption au Maroc: etat des connaissances," Janaury 2008.
19 Transparency International, Global Corruption Report, 2007.
20 The most significant cases of financial fraud involved Banque Central Populaire (BCP), Banque Nationale pour le Developpement Economique (BNDE), Caisse Nationale du Credit Agricol (CNCA), Caisse Nationale de Securite Sociale (CNSA), la Caisse de Depot et de Gestion (CDG), Credit Immobilier et Hotelier (CIH), l' Office de la Formation Professionnelle et de la Promotion du Travail (OFPPT), and Royal Air Maroc (RAM).
21 This became explicit when former chairman of the CIH, Moulay Zine Zahidi, who fled to Spain, threatened to reveal the names of well-placed individuals in the Moroccan press.
22 Transparency International, The Global Corruption Report 2006 (Pluto Press, 2006).
23 See for example Transparency Maroc, "Rapport de synthese des resultats des enquetes nationales," 2003.
24 Transparency Maroc, http://www.transparencymaroc.ma/uploads/projets/En/49_1.pdf.
26 "Mise en oeuvre de la politique de voisinage en 2007," April 2008, http://ec.europa.eu/world/enp/pdf/progress2008/sec08_398_fr.pdf.
27 La Cour des comptes marocaines, bilan 2008, http://www.courdescomptes.ma/index.php?option=com_content&view=article&….
28 For excellent analyses of the political dimension of these campaigns, see Guilain Denoeux, "Understanding Morocco's ‘Sanitation Campaign'" (1998); Abdeslam Aboudrar, "La lutte contre la corruption: le cas du Maroc," PNUD 1999; and Hibou and Tozi, "Une lecture d'anthropologie politique de la corruption au Maroc: fondement historique d'une prise de liberté avec le droit," Revue Tiers Monde no. 161, Janvier-Mars 2000.
29 Royaume du Maroc, Ministère de la Modernisation des Secteurs Publics, Le Pacte de Bonne Gestion, 1998, en, http://unpan1.un.org/intradoc/groups/public/documents/cafrad/unpan00411….
30 Royaume du Maroc, Ministere de la Fonction Publique et de la Reforme Administrative, "Amelioration de la Relation Administration – Usagers" (2002); Centre Africain de Formation et de Recherche Administratives pour le Developpement (CAFRAD), "L'etat de l'administration publique au Maroc" (2004).
31 Abdeslam Aboudrar, "La lutte contre la corruption: le cas du Maroc," http://www.rdh50.ma/fr/pdf/contributions/GT10-5.pdf.
32 L'Economiste, no. 1278, 28/05/2002, http://www.leconomiste.com/article/affaire-cih-8220nous-pensons-que-la-…; La Vie economique, 08/09/2006, http://www.lavieeco.com/news/economie/cnss-cih-bcp-bnde...-les-proces-r….
33 Transparency Maroc, "Rapport moral 2005," http://transparencymaroc.ma/ar/uploads/mor_rapport/20.pdf.
34 Transparency Maroc, "Rapport moral 2006," http://transparencymaroc.ma/ar/uploads/mor_rapport/21.pdf.
35 Edouard al-Dahdah and Florence Brillaud, "Morocco: Pressing for Progress on Anticorruption." Middle East and North Africa Governance News & Notes 2, no. 1 (January 2008): 7-8, http://documents.worldbank.org/curated/en/2008/01/9791734/middle-east-n….
36 See, for example, Abdeslam Aboudrar (2005), Hibou y Tozy (2000), Abdeslam Maghraoui (2001, 2004), Mohamed Sghir Janjar, Rabia Naciri y Mohamed Mouaquit, http://www.dd-rd.ca/site/_PDF/publications/maghrebMO/ddMaroc.pdf; Mouna Cherkaoui and Driss Ben Ali, "The Political Economy of Growth in Morocco," Quarterly Review of Economics and Finance, no. 46, February 2007: 741; Nicolas Beau y Catherine Graciet, Quand le Maroc sera Islamsite (Paris: La Decouverte: 2006); Guilain Denoeux, "Old Forces, New Dynamics and a Way Forward," Middle East Policy 14, no. 4. (2007); Azeddine Akesbi, [http://www.amse.ma/Projet%20intervention%20AK%20AMSE2008.pdf]; Transparency Maroc 2008 Annual Press Report, y el boletín de 2009 de Trasnparency Maroc.
38 The constitutional referendum was passed with the notoriously familiar 98.99 percent approval rate and a similar rate of participation. Yet, the campaign to boycott the referendum led by the February 20 movement was strong and effective, as seen from the deserted polling places.
39 Public companies are often sold in tranches designed to link a strategic investor with a broader shareholding public through a listing on the Casablanca Stock Exchange (CSE) and shares reserved for workers. Several complex transactions are needed to sell one firm. For example, the SAMIR oil refinery will come to market in at least three tranches: 30% in a CSE IPO, 30-51% through tender to a strategic investor, 1.7% to workers. Authorities have not excluded a secondary stock offering either on the CSE or to international institutional buyers. Some small industrial firms, which often have severe financial difficulties, need a presale restructuring to give them a fighting chance for success after privatization. Officials boast that no company had yet been closed because of privatization.
40 Tatiana Serafin, "The World's Richest Royals," Forbes, June 6, 2009.
41 Tel Quel, Special Series, Mohammed VI: Le Business Man, July 18-24, 2009.
42 "Better Governance for the Middle East and North Africa: Enhancing Inclusiveness and Accountability," World Bank (2003); Daniel Kaufmann, Aart Kraay and Massimo Mastruzzi, "Governance Matters VII: Governance Indicators for 1996-2007," World Bank Policy Research, June 2008.