Does inequality matter to individual welfare: Arab spring and socioeconomic crisis
Abstract
Does Inequality Matter to Individual Welfare: Arab Spring and Socioeconomic Crisis
In this paper we want to explore the effects of relative income differences on well-being in the Arab world. Income inequality seems a persistent disadvantage for the poor and could be among the economic roots of the uprising and quest for “freedom and social justice.” Among other factors that contributed to the Arab Spring are unemployment, authoritarian government, corruption, and rising social injustice. In order to demonstrate the relationship between the rate of growth, rate of change in economic freedom, and economics of happiness, the following variables are used: size of the government, property rights, freedom of trade, regulation of the capital market, and the labor market. The sources used for this paper are the Annual Report of Index of Economic Freedom by the Heritage Foundation and the Economic Freedom of the World by Frasier Institute from 1996 to 2013. This paper demonstrates that an integral part of sustainable development is competition, which can be done by increasing the role of non-governmental organizations (NGOs) and decreasing the role of state-owned enterprises (SOEs). Arab governments should begin by taking “five” essential steps: 1) institutionalize human rights, 2) build a civil society, 3) provide economic opportunity and growth, 4) improve education and health care, and 5) crackdown on corruption and establish a fair judiciary. As a policy recommendation, these changes would reduce the socioeconomic crisis and help increase welfare, democracy, and economic happiness for individuals in the Arab nations.
JEL Codes: O57, F01