The impact of the Arab spring on the Tunisian economy

We use Synthetic Control Methodology to estimate the output loss in Tunisia as a result of the "Arab spring". Our results suggest that each Tunisian citizen lost, on average, an estimated US$ 600 (5.5 percent of GDP), US$ 574 (5.1 percent of GDP) and US$ 735 (6.4 percent of GDP) in 2011, 2012 and 2013, respectively. These findings are robust to a series of tests. Investment was the main channel through which the economy was impacted by the Arab Spring, as investors were afraid to invest in a highly volatile political environment.