The relationship between Arab Spring and income: Does governance Matter? Evidence from Egypt and Tunisia

The Arab Spring was a series of anti-government protests, uprisings and armed rebellions that spread across much of the Arab world in the early 2010s. It began in Tunisia in response to corruption and economic stagnation. This study aims to examine the causal inference of the Arab Spring in Tunisia and Egypt on economic growth using the Difference in Differences approach. Besides, it explains a mechanism of how similar conflicts can have different effects among economies. Empirical evidence shows that the Arab Spring had a positive impact on economic growth in both countries. However, when the Arab Spring interacted with the governance indicator the results vary. In Egypt, governance effectiveness has a positive impact on economic growth. For Tunisia, voice accountability promotes economic growth. These results challenge the conventional empirical results about the negative effects of the Arab Spring on economic growth. This line of research could help policymakers develop better tools to alleviate the negative impacts of revolutions.