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Arab countries between winter and spring: Where democracy shock goes next!

Arab countries between winter and spring: Where democracy shock goes next!
Arab countries between winter and spring: Where democracy shock goes next!

We examine the role of democracy shocks in the cross-country economic growth processes over a period of five decades since 1960. The recent uprisings that arose independently and spread across the Arab world form the main context of our investigation. We study if (i) a shock to democracy in one country triggers institutional reforms and growth upsurge in the neighbouring countries, and (ii) the magnitude and direction of response to democracy shocks are contingent upon income pathways of countries. To estimate the spillover effects of democracy shocks, we model and estimate growth interdependence among individual countries with similar democratic characteristics. To study the nature of responses of democracy shocks on cross-country growth processes, we build and estimate a Global Vector Autoregression (GVAR) model where we allow countries to be interdependent with regard to bilateral migration and geographical proximity. Using the GVAR model, we also stimulate a positive shock to democracy in Egypt-the most populous Arabic country-and study its impacts on institutional reforms and economic growth in the rest of the Arab World. We find that high and upper-middle income countries are immune to democracy shocks in Egypt, whereas the lower middle and low income countries are susceptible to another revolutionary wave.

Arab Spring, Democracy, Democracy shocks, Global VAR, Revolutionary wave, Spatial growth interdependence
0304-260X
1-19
Abdel-Latif, Hany
c7ba9ced-4182-4e68-b711-1f7917a86e50
Mishra, Tapas
218ef618-6b3e-471b-a686-15460da145e0
Staneva, Anita
72379833-2b06-4193-ba5a-f979f8403965
Abdel-Latif, Hany
c7ba9ced-4182-4e68-b711-1f7917a86e50
Mishra, Tapas
218ef618-6b3e-471b-a686-15460da145e0
Staneva, Anita
72379833-2b06-4193-ba5a-f979f8403965

Abdel-Latif, Hany, Mishra, Tapas and Staneva, Anita (2019) Arab countries between winter and spring: Where democracy shock goes next! Economies, 7 (1), 1-19, [20]. (doi:10.3390/economies7010020).

Record type: Article

Abstract

We examine the role of democracy shocks in the cross-country economic growth processes over a period of five decades since 1960. The recent uprisings that arose independently and spread across the Arab world form the main context of our investigation. We study if (i) a shock to democracy in one country triggers institutional reforms and growth upsurge in the neighbouring countries, and (ii) the magnitude and direction of response to democracy shocks are contingent upon income pathways of countries. To estimate the spillover effects of democracy shocks, we model and estimate growth interdependence among individual countries with similar democratic characteristics. To study the nature of responses of democracy shocks on cross-country growth processes, we build and estimate a Global Vector Autoregression (GVAR) model where we allow countries to be interdependent with regard to bilateral migration and geographical proximity. Using the GVAR model, we also stimulate a positive shock to democracy in Egypt-the most populous Arabic country-and study its impacts on institutional reforms and economic growth in the rest of the Arab World. We find that high and upper-middle income countries are immune to democracy shocks in Egypt, whereas the lower middle and low income countries are susceptible to another revolutionary wave.

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Accepted/In Press date: 26 February 2019
e-pub ahead of print date: 14 March 2019
Keywords: Arab Spring, Democracy, Democracy shocks, Global VAR, Revolutionary wave, Spatial growth interdependence

Identifiers

Local EPrints ID: 429653
URI: http://eprints.soton.ac.uk/id/eprint/429653
ISSN: 0304-260X
PURE UUID: 58711837-6fad-4383-9bf7-883b8c147534
ORCID for Tapas Mishra: ORCID iD orcid.org/0000-0002-6902-2326

Catalogue record

Date deposited: 03 Apr 2019 16:30
Last modified: 07 Oct 2020 02:06

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