The Arab world is undergoing a major political transition. The final outcomes of the changes are far from certain. Nevertheless, there have been and will continue to be economic consequences from the moves towards democracy. This column looks at 90 attempts at transition and finds that countries with rapid transitions, irrespective of whether they are successful or failed, experience swift recoveries and a long-run growth dividend of about one percentage point relative to pre-transition growth levels.

The “fear of being left behind” helped initiate and sustain reforms in the earlier phases of transition, but the same fear now jeopardises the sustainability of growth and institutional change in Eastern and Central Europe.