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From revolutions to realities: an empirical investigation of the Arab Spring's consequences

Abstract

With the irrevocable change in the Arab world over the last decade, fully understanding the economic and political impact of the Arab Spring is paramount for policymakers. This dissertation consists of three empirical essays on the Arab Spring which attempt to capture causal relationships between Arab Spring and some political and economic factors. Exogenous shocks such as the experiences of revolution are treated as natural experiments which minimize problems of endogeneity and selection. Therefore, these essays are analyzed based on the synthetic control method and synthetic difference-in-differences. The first essay concerns the impact of the Arab Spring on economic growth, corruption and democracy. I focused on Tunisia and Libya as a case study of Arab Spring countries using the synthetic control method (SCM). I found that there was a negative impact of the Arab Spring on economic growth after 2010 for both Tunisia and Libya. On the other hand, the results suggested that although there was a substantial increase in democracy after the Arab Spring for both Tunisia and Libya, democracy sharply decreased in 2015 in Libya due to armed conflict. Surprisingly, the results showed that there was a substantial increase in corruption in both Libya and Tunisia after the Arab Spring. In the second essay, I estimated the Arab Spring's impact on foreign aid by using the synthetic difference-in-difference method. I examine whether the Arab Spring affects the distribution of foreign aid. I argue that the conflict may respond differently to different types of aid because of the objectives and aid-giving motives. The results indicate that, following the Arab Spring, there was a general increase in total foreign aid to affected countries, with exceptions for certain donors and a stronger increase for "non-traditional Western allies," with the United States being the largest contributor. Also, the findings suggest that, following the Arab Spring, various donors increased foreign aid to affected nations, particularly in government and civil society support, as well as humanitarian aid, with the United States focusing on government and civil society aid in Tunisia, Libya, and Syria, European countries emphasizing government and civil society aid in Libya and Tunisia, and Multilateral aid generally increasing, except for government and civil society aid in Yemen. In the third essay, I studied the spillover effect of the Arab Spring by investigating its influence on nearby countries concerning economic growth, bilateral trade, and foreign direct investment. I aimed to address how proximity to Arab Spring countries impacts the economic growth, bilateral trade, and foreign direct investment of neighboring economies. The results found that countries located within 2000 kilometers of Arab Spring nations experienced a significant negative impact on both real GDP and net inflow of foreign direct investment (FDI). However, the negative effects on bilateral trade were not statistically significant, suggesting that engaging in trade with Arab Spring countries did not necessarily harm the economic growth of neighboring countries.

Description

Includes bibliographical references.
2023 Fall.

Rights Access

Embargo expires: 12/29/2024.

Subject

corruption
economic growth
spillover effect
democracy
Arab Spring
foreign aid

Citation

Associated Publications