Can data predict the next revolution?

Consultants tend to apply data-based approaches to making predictions about the future.  I’ve helped companies identify quantifiable ways of measuring countries by factors such as the propensity to buy auto insurance or cultural compatibility with online payments.

So – the consultant in me couldn’t help but to notice two recent articles that use data to answer the question, “Where will the next Middle Eastern revolution take place?”

The first article is by New York Times Op-Ed columnist Charles Blow. Blow produces a chart that evaluate 23 Middle Eastern polities by seven metrics – median age, unemployment rate, income inequality (Gini Index), spending on food (as percent of income), level of democracy, regime type, and Internet penetration. He then color-codes the metrics that suggest potential for instability (for example, colored food prices are high; so is colored Internet penetration; an authoritarian regime is colored also).

Blow’s chart is compelling because Egypt and Tunisia are the most-colored countries. Clearly, they were ripe for revolution. It is less certain which countries come next. There are important gaps in the metrics for income inequality and food spending (which is important because of the recent surge in agricultural commodity prices). However, the table tends to suggest that Algeria and Jordan are most unstable.

Next is the aptly-named “Shoe-Thrower’s Index” from the Economist. This is a bar-graph that scores 17 Middle Eastern countries’ propensity to revolt on a scale of 0 to 100.

Like Blow, the Economist emphasizes age (share of the population under 25) and the nature of the government (authoritarian or democracy). However, the “shoe-thrower’s” other metrics (GDP per person, corruption, tenure of the current regime) are new.

Not surprisingly, the Economist’s index produces a different order of countries: Yemen, Libya, and Syria top the list, while Algeria and Jordan are in the middle of the pack.

So what can we glean from these analyses? Well – data won’t provide the complete answer. These analyses provide an excellent starting point to thinking about revolutionary candidates, but the fact that their predictions are so different means more thought probably needs to be placed on the selection of metrics. What demographic, political, and economic data is really, truly most indicative of the potential for revolution?

Secondly, it is critical to also think about other qualitative intangibles. For example, which regimes are willing to kill a lot of people if that is what is needed to keep power? Which countries possess secret police forces with a huge network of state-paid informants? What is the relationship between the president and the military? Have some governments mitigated the surge in food prices with increased subsidies?

Answering these questions can help provide a better picture. I’d bet Libya won’t have a revolution because Gadaffi has monopolized all power in the country after 41 years in the presidency (and he also has oil money). I’ll also bet that Bashar Asssad will be OK in Syria -thanks to an extensive secret police and recent hikes in food price subsidies.

Written by David Gates for Emerging Markets Blog

This entry was posted in Market Analysis, Middle East and tagged , , , , . Bookmark the permalink.

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