Was the Arab Spring Economically or Politically Instigated? A Panel Data Analysis

Abstract

The Arab Spring has drastically altered the direction in which the MENA region was once heading – a revolution that once aimed to democratize one of the most appointive regions in the world has distorted everything they had in mind. This paper aims to analyze the conditions that had triggered Arab Spring countries to let demonstrators leave their loved ones, belongings and occupations behind and risk whatever stability their country had to offer to riot against their governments. The aim is to identify whether these eliciting conditions were economic or political and how countries can - in the future - direct policies towards preventing such a massive event from reoccurring. The data being observed was collected from The World Bank, IMF, The International Country Risk Guide (ICRG) and Transparency International for Algeria, Bahrain, Egypt, Libya, Morocco, Sudan, Tunisia and Yemen starting in the year 2000 and ending in 2013. The paper will reflect on numerous political and economic variables including GDP per capita, Consumer Price Index, Unemployment rate, Voice and Accountability, Government Effectiveness, and the Corruption Perception Index. The study will be conducted through the use of econometric models via the statistical program, E-Views. Finally, after conducting the econometric tests with the use of PLS and Fixed Effect SUR it was concluded that indeed all the political and economic factors do have a significant relationship with the level of Internal Conflicts in the eight selected nations. Specifically, the results proved that there is a positive relationship between all the selected variables and the improvement in internal conflict level except for the unemployment rate which showed a negative relationship. Therefore, all these results conclude that when either or all GDP per capita, Voice and Accountability and Government effectiveness increases this causes the level on internal conflicts within a nation to decline and vice versa. Furthermore, the only variable that did not match the hypotheses was the Consumer Price Index which resulted in a positive relationship meaning when inflation increases this causes more stability in a nation which goes against the norm, but the coefficient result was very low implying that the impact of inflation on internal conflict is economically insignificant.