Does MENA-crisis point to time-series fundamental changes? / Reshaping investors’ sentiments within autocratic countries (SIDE-NOTE)

In our side-note “Positive view on power centralization scenario”, we described a hypothesis under which, thus far, capital flows did not fully discriminate between democracies and autocracies. We assume that most investors rarely asked whether investing in pro–authoritarian countries, such as Kazakhstan, China or Egypt, was riskier than investing in pro–democratic Brazil, India or Turkey, with political risks like those common to EM regional features. Moreover, autocracies were considered guarantors of stability. However, with the ongoing MENA–crisis, such attitudes may be on the wane, reflected in our intensive concern for monitoring authoritarian countries’ credit spreads...