Synthetic Differences-in-Differences and Endogenous Shock

[Abdalla Muktad]

I study the impact of the Arab Spring (dummy variable) on foreign aid (natural log) to Arab Spring countries using the Synthetic difference-in-differences. However, the major concern is the endogenous nature of the shock under scrutiny in this study. The treatment is likely to be driven by observable (and unobservable) factors that could also influence donor countries' aid allocation. More specifically, while socio-political, economic and demographic structural characteristics of recipient countries (e.g. human rights violations, political corruption, unemployment and percentage of educated youth) could affect the likelihood of the Arab Spring shock. Could you give me some suggestions about how could I address this issue in my paper?