IDEAS home Printed from https://ideas.repec.org/p/erg/wpaper/954.html
   My bibliography  Save this paper

Arab Countries Between Winter and Spring: Where Democracy Shock Goes Next!

Author

Listed:
  • Hany Abdel-Latif

    () (Swansea University)

  • Tapas Mishra
  • Anita Staneva

Abstract

This paper presents rigorous mechanisms to study how persistent democratic shocks in one country produce spillover effects and comprise a major determinant in dynamic growth interdependence among nations. Taking the case of the Arab Spring in particular and employing both spatial and panel VAR mechanisms, we demonstrate that stronger relational ‘proximity’ among nations with respect to democracy is likely to trigger similar institutional reforms and growth upsurges in the neighborhood. Democratization event chronology is employed to identify transitional dynamics among countries’ democratic pathways. A comprehensive model of transmission mechanism and response of democratic is further initiated by estimating a Global Vector Autoregression method among nineteen Arab countries. Our analysis reveals patterns of discrete changes in regimes that run counter to the dominant aggregate trends of democratic waves or sequences, presenting how the ebb and flow of democracy varies among the world’s regions. The main finding suggests that the current revolutionary waves in the Arab World can be understood in light of the economic situation in a given country. More specifically, we find that high and upper middle income countries are immune to the recent democratic shock transference, whereas the lower middle and low income countries seem to be perfect candidates of another revolutionary wave.

Suggested Citation

  • Hany Abdel-Latif & Tapas Mishra & Anita Staneva, 2015. "Arab Countries Between Winter and Spring: Where Democracy Shock Goes Next!," Working Papers 954, Economic Research Forum, revised Oct 2015.
  • Handle: RePEc:erg:wpaper:954
    as

    Download full text from publisher

    File URL: http://erf.org.eg/wp-content/uploads/2015/12/954.pdf
    Download Restriction: no

    File URL: http://bit.ly/2lKJQKB
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Clive, W.J. & Lin, Jin-Lung, 1995. "Causality in the Long Run," Econometric Theory, Cambridge University Press, vol. 11(03), pages 530-536, June.
    2. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
    3. Vansteenkiste, Isabel, 2007. "Regional housing market spillovers in the US: lessons from regional divergences in a common monetary policy setting," Working Paper Series 708, European Central Bank.
    4. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
    5. Koukouritakis, Minoas & Papadopoulos, Athanasios P. & Yannopoulos, Andreas, 2015. "Linkages between the Eurozone and the South-Eastern European countries: A global VAR analysis," Economic Modelling, Elsevier, vol. 48(C), pages 129-154.
    6. Pesaran M.H. & Schuermann T. & Weiner S.M., 2004. "Modeling Regional Interdependencies Using a Global Error-Correcting Macroeconometric Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 129-162, April.
    7. Filippo di Mauro & L. Vanessa Smith & Stephane Dees & M. Hashem Pesaran, 2007. "Exploring the international linkages of the euro area: a global VAR analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(1), pages 1-38.
    8. Madsen, Jakob B. & Raschky, Paul A. & Skali, Ahmed, 2015. "Does democracy drive income in the world, 1500–2000?," European Economic Review, Elsevier, vol. 78(C), pages 175-195.
    9. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    10. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    11. Niklas Potrafke, 2013. "Democracy and countries with Muslim majorities: a reply and update," Public Choice, Springer, vol. 154(3), pages 323-332, March.
    12. Yang, Benhua, 2011. "Political democratization, economic liberalization, and growth volatility," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 245-259, June.
    13. P. Hiebert & I. Vansteenkiste, 2010. "International trade, technological shocks and spillovers in the labour market: a GVAR analysis of the US manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 42(24), pages 3045-3066.
    14. Torsten Persson & Guido Tabellini, 2009. "Democratic Capital: The Nexus of Political and Economic Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(2), pages 88-126, July.
    15. Perron, Pierre & Rodriguez, Gabriel, 2003. "GLS detrending, efficient unit root tests and structural change," Journal of Econometrics, Elsevier, vol. 115(1), pages 1-27, July.
    16. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    17. Claude Diebolt & Tapas Mishra & Bazoumana Ouattara & Mamata Parhi, 2013. "Democracy and Economic Growth in an Interdependent World," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 733-749, September.
    18. Çakır, Mustafa Yavuz & Kabundi, Alain, 2013. "Trade shocks from BRIC to South Africa: A global VAR analysis," Economic Modelling, Elsevier, vol. 32(C), pages 190-202.
    19. Silvia Sgherri & Alessandro Galesi, 2009. "Regional Financial Spillovers Across Europe; A Global VAR Analysis," IMF Working Papers 09/23, International Monetary Fund.
    20. M. Hashem Pesaran & Ron Smith, 2006. "Macroeconometric Modelling With A Global Perspective," Manchester School, University of Manchester, vol. 74(s1), pages 24-49, September.
    21. James C. Murdoch & Todd Sandler, 2002. "Economic Growth, Civil Wars, and Spatial Spillovers," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 91-110, February.
    22. Emre Toros, 2010. "The Relationship Between Islam and Democracy in Turkey: Employing Political Culture as an Indicator," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 95(2), pages 253-265, January.
    23. Eickmeier, Sandra & Ng, Tim, 2011. "How do credit supply shocks propagate internationally? A GVAR approach," Discussion Paper Series 1: Economic Studies 2011,27, Deutsche Bundesbank.
    24. Fredriksson, Per G. & Neumayer, Eric, 2013. "Democracy and climate change policies: Is history important?," Ecological Economics, Elsevier, vol. 95(C), pages 11-19.
    25. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    26. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    27. Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
    28. Perron, Pierre & Rodriguez, Gabriel, 2003. "GLS detrending, efficient unit root tests and structural change," Journal of Econometrics, Elsevier, vol. 115(1), pages 1-27, July.
    29. Gründler, Klaus & Krieger, Tommy, 2016. "Democracy and growth: Evidence from a machine learning indicator," European Journal of Political Economy, Elsevier, vol. 45(S), pages 85-107.
    30. Godfrey, Leslie G, 1978. "Testing for Higher Order Serial Correlation in Regression Equations When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1303-1310, November.
    31. Godfrey, Leslie G, 1978. "Testing against General Autoregressive and Moving Average Error Models When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1293-1301, November.
    32. Plümper, Thomas & Neumayer, Eric, 2010. "The Level of Democracy during Interregnum Periods: Recoding the polity2 Score," Political Analysis, Cambridge University Press, vol. 18(02), pages 206-226, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • F - International Economics
    • I - Health, Education, and Welfare
    • J - Labor and Demographic Economics
    • O - Economic Development, Innovation, Technological Change, and Growth
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erg:wpaper:954. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sherine Ghoneim). General contact details of provider: http://edirc.repec.org/data/erfaceg.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.