From revolutions to institutions: the experience of Arab reform

Abstract

PurposeThe purpose of this study is to outline the reasons for the 2011 Arab Spring and why the Arab states failed to achieve sustainability and inclusive growth over the past three decades.Design/methodology/approachThis study used the augmented growth model framework derived from a production function and a dynamic panel LSDCV estimation, which incorporates aggregated economic and political reform indicators generated by principal component analysis. The empirical analysis is a comparative assessment of the Arab region as a whole and the Gulf countries and emerging Arab countries. This study is based on several panel data models for the Arab region’s reform programmes from 1995 to 2018.FindingsThe absence of robust economic and institutional reforms was the main reason for the uprising. Structural reforms in Gulf countries have been insufficient and more difficult to address than macroeconomic stability. By contrast, Arab emerging economies have achieved strong progress in structural reform but with weak progress in economic stability. Critically, governance indicator reforms enhance growth, with different items of governance based on the type of each group of countries. The results of this study confirm that reform is simultaneously political, social and economical.Practical implicationsEconomic reform should not be seen in a vacuum or in isolation from the political and social choices that society makes. Looking forward, the Arab reform agenda must address critical governance issues that hinder the effectiveness of reform policies.Originality/valueTheoretically, this study reappraises governance’s role in economic growth using a unified mathematical model. Methodologically, this study analyses economic, social and political reform components in the Arab region using econometric analysis. Empirically, this study investigates regional socioeconomic reform programmes. Existing studies have failed to recognise the economic and institutional policy reform patterns in the Arab world.