Charles V was king of Spain from 1516-1556. He was born in the Low Countries and did not originally speak Spanish. When he became king, he came to Spain with many other officials to rule with him. These people looked down on the Spaniards, which made many of them angry. When Charles was elected Holy Roman Emperor a few years later, he left Spain for some time. In his absence, the people revolted against him. Eventually the nobility became convinced that the revolt was not just harmful to the king, but to themselves as well. With their help, the revolt was put down easily. Due to the suppression of this revolt, Charles was able to rule in a more absolutist fashion when he returned.
During the reign of Charles’s son Philip II, the Dutch rebelled against the rule of Spain. The Netherlands were mostly Catholic at the beginning of Philip’s reign, but were also tolerant of Protestantism. When Philip began persecuting Protestants for heresy the Dutch were angered, Catholic and Protestant alike. When king Philip sent the Duke of Alba with 10,000 men to the Netherlands, the Dutch rose up in revolt under William the Silent. The rebellion continued till 1648, when the seven northern gained their independence.
The Dutch are connected to something called a positive demonstration effect. The Dutch Republic did not have a king, had secure property rights, religious toleration, and intellectual freedom. The other nations saw that with all of these things, the Dutch Republic was a rich and prosperous country.
Spain on the other hand is connected to a negative demonstration effect. Spain did not tolerate other religions, but persecuted Protestants and members of other religions. Spain at the same time began experiencing an economic decline, in contrast to the prosperity of the Dutch.