|The Government of Morocco designed and implemented an ambitious voluntary retirement program (VRP) in 2005—the only example of its type in the MENA region. More than 39,000 employees (7.6 percent of civil servants) elected to benefit from this program and left the public sector. The VRP is one of the most important components of the broad Public Administration Reform program (PARP) launched in 2003. In the short term, the VRP aimed at streamlining civil service and containing the wage bill at fiscally sustainable levels. In the medium term, it sought to facilitate the reorientation of the State to better fulfill its social and economic priorities while improving productivity in the civil service.
The VRP has achieved most of its objectives. Although the current size of the civil service has reached its aggregate level prior to the VRP reform program, its age structure, skills mix, and geographic coverage have improved significantly. The VRP allowed the government to recruit new civil servants on the basis of proven needs and profiles, mainly in social sectors such as education and health. The improved composition and coverage of the public sector has enhanced productivity and improved service delivery. Second, the cost of the civil service on the budget has been brought to sustainable levels. Indeed, the wage bill has steadily declined since 2005 from 11.8 percent of GDP to around 10 percent end 2009.
Many factors explain the success of this ambitious program. There was good preparation during all phases of the operation. The communication phase succeeded in widely disseminating needed information to all stakeholders, especially potential candidates, using all available media. The efficient management in the implementation of the VRP also helped streamline the process and win the credibility for the operation. From the outset, the direct involvement of the Prime Minister in monitoring the implementation process sent a strong signal to stakeholders.
The Morocco VRP program also suffered from some problems that are typical for this type of program. The most critical shortcoming was that of adverse selection - i.e. the best and the brightest civil servants tended to be the ones who left. This problem was augmented by some design weaknesses. The VRP did not target specific jobs and grades, and all civil servants were eligible to participate. Indeed, the design of the severance packages favored civil servants in the highest salary range, which includes senior personnel with accumulated managerial, academic and technical experience - exactly the profiles most needed for a high performing public service. This resulted in the preponderant departure of higher ranked civil servants, while the government would have preferred the departure of lower ranked personnel where redundancies and weak productivity are most pronounced.
The VRP experience carried out by Morocco provides several important lessons. First, it is possible to succeed a major downsizing operation of a costly and unproductive public civil service without generating major disruptions in service delivery. Second, it is also possible for such an operation to be financially attractive and result in significant savings for the budget. Third, the sustainability of the VRP’s results depends on the timely implementation of the related and complementary reforms, such as geographic redeployment of existing employees, new hiring targeted to needed skills and geographic locations, and timely and continuous training of civil servants to adapt their skills to the new needs of a modernized public sector. Fourth, such efforts need to be carefully targeted to avoid problems of adverse selection.