There are two basic effects at work.
1. There are essentially sections of spiral arranged in a circle.
2. The design confuses our eyes so that we cannot see a complete circle at once.
The combination of the two effects is that we believe it to be a spiral based on the hints (sections of spiral).
The effects that I see that make it look like a spiral.
1) Alternating black/white and light/dark blue squares from one concentric circle to the next are alternating, so the squares themselves (e.g. just the black squares) DO form a spiral toward the center.
2) the diamond pattern at the corners of the black/white squares make it appear that each square is "slanted" in the direction of the apparent spiral. Therefore, the entire circle appears to be nearing the center as you follow it around.
Originally posted by joneschr I thought perhaps it had something to do with depth perception - but closing 1 eye doesn't trick it in anyway.
It may still have something to do with depth perception. Many of the clues for depth are not binocular (.e.g, occlusion); they can still operate with just one eye open. That's why the world does not go flat when you close one eye.