Several differences I haven't seen people talk about.
1. coastal plains. The mountains take up more of Haiti, whereas DR has more coastal plains to allow agriculture.
2. different colonial history. The entire island started out as a Spanish colony then what is now Haiti was handed over to France around 1700. A Spanish speaking country is going to able to have easier economic ties with the primarily Latin American countries that surround it.
3. Tourism could be affected by racism. Are Americans and other countries more comfortable visiting a country that is less black. (Haiti 90%, DR 50%)
"At the end of the colonial era, black slaves made up 90% of Haiti's population, while less than half of Dominicans were Africans in bondage. Both societies were deeply stratified by race, but most of the whites and many of the mixed race people fled Haiti during the Revolutionary era beginning about 220 years ago."
5. For whatever reason, Haiti has been less stable than Puerto Rico through history.
"The problem was compounded by Haiti's ethnically diverse population. "The slaves came from over a hundred different ethnic groups and originally had nothing to do with each other," Oliver Gliech, an expert on Haiti at the Latin America Institute at the Free University in Berlin, says.
"For centuries, they've experienced how power was brutally practiced and legitimized," he says. It's little wonder that the bloody wars in the 19th century were followed by rebellions, political upheaval and coups as well as frequently changing self-proclaimed monarchs and dictators, he adds. That pattern has continued in the country till today."
Ah, one of my favorite all time developmental questions. Spent some time in Haiti and DR for extended periods. A Family member fled Baby Doc Duvalier then tried to return under Preval. Both places are stunningly beautiful and the people are warm and friendly.
There is not one thing or even five but a hundred things DR got sort of right. Some highlights: (1) The stability, institutions and reduced corruption (land titles, functioning courts, contract enforcement) that let DR build the Zona Industrial's (ZI) which generated export earnings. 2) The large diaspora of hard workers and political trouble makers (leaving created stability) who send back remittances for school children and housing. 3) The government focused on tourism when China (with US help) began to dominate low wage manufacturing. They attracted foreign investment and created megaresorts and jobs during the 1990-2020. (4) Finally, in the DR, corporate and elite control the state (much like Haiti) but with a voice for the poor. DR also has a "cultural" optimism that drives some of the success. They still are plagued poverty, corruption and human trafficking.
Haiti, if you can imagine, is a completely institution-less country. The major institution are the cellphone company, EDH, the ports and the schools. If you go to a government office there is no one there or no one who can resolve the problem. The politicians do not meet. Rubbish is burned not picked up. Water is spotty. And there are rumors everywhere (often very accurate).
Everything is private: Hospitals, schools, doctors, bodyguards. There is no personal security. If you are elite, you live behind a strong fence with broken glass embedded on top. You have a bodyguard/driver. If you are middle class, you have a personal firearm. And if your poor, you hope you have your community to protect you. It is hard to imagine the level of personal "insecurite." Note: Had an off duty cop flash his fire arm because he want us to move our car so his truck could pass.
Haiti also has resource issues and an exploding population. Much of the country is mountainous with limited rainfall. There is also a limited amount of arable land for farming, primarily in the Artibonite Valley. Haiti grows rice.
In Haiti's case, development, is more of a failure to launch. They could not stabilize their institutions to build the infrastructure needed to attract foreign investment. Haiti started exporting right when the China shock started. So basically, the jobs and development of Haiti took place: But in China. Despite being one of the most interesting places in the Caribbean, Haiti never made the transition to tourism. The Haitian diaspora send back about $3B vs. 9B for DR. Most likely due to US discrimination.
Finally, I would go back in a minute to Haiti (if it was safe) or DR. Two of my favorite places to visit.
Well your blog post is like a Christian fundamentalist trying to cope with evidence that the universe was not created in six days. Everyone who has some knowledge of basic science will smile seeing those cognitive dissonance motivated explanations.
Haiti population DNA is 95% black, Dominican Republic's DNA is 52% European. Charles Murray's last book explains why it matters to IQ and achievement.
It's interesting that the four neighboring entities -- Haiti, Jamaica, DR, and Puerto Rico -- form two distinct pairs in terms of economic development (https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us-single-benchmark?time=1900..latest&country=DOM~JAM~HTI~PRI). Obviously there are unique factors for each (e.g., Puerto Rico's high numbers due to its relationship to the US), but I do wonder how much difference the two sets of patterns reflects that one group is Spanish speaking and the other French-Creole/English, given the overall economic growth of the Spanish speaking parts of the hemisphere (most definitely including southern Florida).
Nice article. Wish there was something more definitive in terms of conclusions but I guess it is what it is. Here’s a thought, is there any evidence one way or the other that prior to the divergence DR had better human capital than Haiti? This could be anything ranging from people with more basic education, business or technical experience.
I think there are four factors at play that I can think of.
They might not be the most important but I do think they are relevant.
1. Haiti before it became independent was the sort of society that Daron Acemoglu and James Robinson described in their book "Why Nations Fail" . The French set up extractive institutions whose purpose was to maximize sugar production. As a result Haiti was very important to the French empire.
The side of the island that became the Dominican Republic on the other hand was a backwater of the Spanish empire, undeveloped. The Spaniards were far more interested in exploiting the resources of Peru and Mexico than what would become the DR. Though slavery was legal in what would become the Dominican Republic it was not as central to the economy as it was in Haiti.
These initial difference would affect the development of both countries even after they became independent and even after some of the extractive institutions (i.e. slavery) where abolished. Slavery and the extractive institutions that replaced them in Haiti discouraged savings and investment to a greater extent than in the Dominican Republic.
2. Haiti was an example that potential trading partners of Haiti did not want to encourage. Black slaves rising up, killing their masters and starting a republic...not something that Europe or slave owners in the US wanted to encourage.
Even after slavery was abolished it's not like racism magically disappeared.
In the 20th century there would be more prosperous countries with black majorities but by the time these countries became independent the attitude of European countries and the US had been influenced by the Second World War and the Cold War. Neither Europe nor the US wanted to antogonize the non-white countries of the newly independent Third World.
3. Haiti is a country where the overwhelming majority speak Creole and a small minority speaks French. It's isolated from its neighbors who speak English and Spanish.
4. The Dominican Republic, has followed better policies and has had more stability than Haiti, at least going back to 1960. These is an important factor but it is not isolated from the other three factors.
"But how to get a country to collectively decide to pursue growth — and the political stability and smart policy required for that growth — is a harder question entirely".
I'm kind of surprised you didn't mention Daron Acemoglu's hypothesis from why nations fail. He makes the argument that Haitian colonial rule was more extractive than DR's, and that even after liberation Haiti failed to establish inclusive institutions. Acemoglu contends that extractive institutions can be as efficient, or more efficient, than inclusive institutions up to a point (South America was wealthier than North America 'til 1800 an onwards for example). In the case of Haiti vs DR the 1960s was the point at which the competitive advantage of DR's more inclusive institutions became apparent.
Having looked some more, I don't really see much of a divergence in 1960. DR's GDP/cap in 1960 was already about 3x that of Haiti, it's just that the handles on the hockey sticks always look small when you zoom out far enough.
DR has just been pulling away from Haiti pretty consistently since 1960, and still are. The difference in 1960 was already quite substantial, in fact it's the same as the difference between Spain and Mexico today. And as Guy mentioned in the comments; DR had 10 years greater life expectancy than Haiti by 1960 - Spain's life expectancy is 8 years greater than Mexico's.
So I'm mostly leaning towards this great divergence between Haiti and DR in 1960 actually not being thing. For all we know it may have taken DR 100 years by 1960 to triple their GDP relative to Haiti, and the true divergence in DR's GDP trajectory was sometime in the 1800s...
I would suggest metals extraction has had an influence. First nickel mining contributed almost 50% of gap as nickel mining declined gold mining began which quickly took over, again contributing almost 50% to the gdp.
I guess my question is more about morality than economics, but it would seem at first blush that France clearly owes Haiti reparations. But if France were to pay such reparations then most or all of it would end up in some gangster’s bank account in the caymans. So France seems to have a duty to pay, but this could easily make the world worse off. What then should France do?
The photo contrasting the two sides of the Haiti-DR border is a really stark contrast. But I'm not sure the deforestation is the biggest difference. The DR side isn't actually that heavily forested either. It's more like savannah or scrubland, like Southern California, with low bushes on the hilltops and sides, and trees in the creases between hills where water flows. Instead, I think the biggest contrast is that the Haitian side appears to be overgrazed (with cattle? I don't know what animals they raise there). Notice all the little paths covering the hillsides on the Haitian side, which I think are probably made by livestock. Notice also that even the grassy or low bush areas on the DR side have more plants growing on them. I bet no one is cutting down grass or bushes for wood or even firewood, and they aren't going around mowing it with a lawnmower either. Again, I think it was livestock that mowed all those bushes down.
You see this contrast in the ranching areas of the Western US too, where low grass on areas used as pasture can contrast with scrub and sagebrush on adjacent lands that aren't grazed by cattle.
Is this representative or related to the growth rates? Maybe DR agriculture was always tilted toward more cash crops and less livestock, which created a virtuous cycle against deforestation and decreasing soil quality.
One thing to consider is that DR basically took over Cuba’s exports after the Cuban revolution. Stealing brand names of cigars and rum fairly flagrantly to exploit the embargo. This was around the time of the divergence. It’ll be interesting to see what happens if embargo ends someday.
Was the “Macroeconomic section” supposed to end mid-sentence after “Personally, I think”? Is this a subtle nod to the lack of definitive answers, or just a snafu?
"As recently as 1960, the two countries had similar standards of living. "
Why did DR have 10 years longer life expectancy then? Similar GDP per capita doesn't necessarily mean similar standards of living.
https://data.worldbank.org/indicator/SP.DYN.LE00.IN?locations=DO-HT
Several differences I haven't seen people talk about.
1. coastal plains. The mountains take up more of Haiti, whereas DR has more coastal plains to allow agriculture.
2. different colonial history. The entire island started out as a Spanish colony then what is now Haiti was handed over to France around 1700. A Spanish speaking country is going to able to have easier economic ties with the primarily Latin American countries that surround it.
3. Tourism could be affected by racism. Are Americans and other countries more comfortable visiting a country that is less black. (Haiti 90%, DR 50%)
"At the end of the colonial era, black slaves made up 90% of Haiti's population, while less than half of Dominicans were Africans in bondage. Both societies were deeply stratified by race, but most of the whites and many of the mixed race people fled Haiti during the Revolutionary era beginning about 220 years ago."
https://www.pri.org/stories/2013-11-14/theres-long-story-behind-anti-haitianismo-dominican-republic
5. For whatever reason, Haiti has been less stable than Puerto Rico through history.
"The problem was compounded by Haiti's ethnically diverse population. "The slaves came from over a hundred different ethnic groups and originally had nothing to do with each other," Oliver Gliech, an expert on Haiti at the Latin America Institute at the Free University in Berlin, says.
"For centuries, they've experienced how power was brutally practiced and legitimized," he says. It's little wonder that the bloody wars in the 19th century were followed by rebellions, political upheaval and coups as well as frequently changing self-proclaimed monarchs and dictators, he adds. That pattern has continued in the country till today."
https://www.dw.com/en/haiti-and-the-dominican-republic-one-island-two-worlds/a-16593022
Note. both articles above are great reading.
Ah, one of my favorite all time developmental questions. Spent some time in Haiti and DR for extended periods. A Family member fled Baby Doc Duvalier then tried to return under Preval. Both places are stunningly beautiful and the people are warm and friendly.
There is not one thing or even five but a hundred things DR got sort of right. Some highlights: (1) The stability, institutions and reduced corruption (land titles, functioning courts, contract enforcement) that let DR build the Zona Industrial's (ZI) which generated export earnings. 2) The large diaspora of hard workers and political trouble makers (leaving created stability) who send back remittances for school children and housing. 3) The government focused on tourism when China (with US help) began to dominate low wage manufacturing. They attracted foreign investment and created megaresorts and jobs during the 1990-2020. (4) Finally, in the DR, corporate and elite control the state (much like Haiti) but with a voice for the poor. DR also has a "cultural" optimism that drives some of the success. They still are plagued poverty, corruption and human trafficking.
Haiti, if you can imagine, is a completely institution-less country. The major institution are the cellphone company, EDH, the ports and the schools. If you go to a government office there is no one there or no one who can resolve the problem. The politicians do not meet. Rubbish is burned not picked up. Water is spotty. And there are rumors everywhere (often very accurate).
Everything is private: Hospitals, schools, doctors, bodyguards. There is no personal security. If you are elite, you live behind a strong fence with broken glass embedded on top. You have a bodyguard/driver. If you are middle class, you have a personal firearm. And if your poor, you hope you have your community to protect you. It is hard to imagine the level of personal "insecurite." Note: Had an off duty cop flash his fire arm because he want us to move our car so his truck could pass.
Haiti also has resource issues and an exploding population. Much of the country is mountainous with limited rainfall. There is also a limited amount of arable land for farming, primarily in the Artibonite Valley. Haiti grows rice.
In Haiti's case, development, is more of a failure to launch. They could not stabilize their institutions to build the infrastructure needed to attract foreign investment. Haiti started exporting right when the China shock started. So basically, the jobs and development of Haiti took place: But in China. Despite being one of the most interesting places in the Caribbean, Haiti never made the transition to tourism. The Haitian diaspora send back about $3B vs. 9B for DR. Most likely due to US discrimination.
Finally, I would go back in a minute to Haiti (if it was safe) or DR. Two of my favorite places to visit.
.
You didn't mention Hernando de Soto's observation about how DR is much better at recording who owns what property.
Well your blog post is like a Christian fundamentalist trying to cope with evidence that the universe was not created in six days. Everyone who has some knowledge of basic science will smile seeing those cognitive dissonance motivated explanations.
Haiti population DNA is 95% black, Dominican Republic's DNA is 52% European. Charles Murray's last book explains why it matters to IQ and achievement.
It's interesting that the four neighboring entities -- Haiti, Jamaica, DR, and Puerto Rico -- form two distinct pairs in terms of economic development (https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us-single-benchmark?time=1900..latest&country=DOM~JAM~HTI~PRI). Obviously there are unique factors for each (e.g., Puerto Rico's high numbers due to its relationship to the US), but I do wonder how much difference the two sets of patterns reflects that one group is Spanish speaking and the other French-Creole/English, given the overall economic growth of the Spanish speaking parts of the hemisphere (most definitely including southern Florida).
Nice article. Wish there was something more definitive in terms of conclusions but I guess it is what it is. Here’s a thought, is there any evidence one way or the other that prior to the divergence DR had better human capital than Haiti? This could be anything ranging from people with more basic education, business or technical experience.
I think there are four factors at play that I can think of.
They might not be the most important but I do think they are relevant.
1. Haiti before it became independent was the sort of society that Daron Acemoglu and James Robinson described in their book "Why Nations Fail" . The French set up extractive institutions whose purpose was to maximize sugar production. As a result Haiti was very important to the French empire.
The side of the island that became the Dominican Republic on the other hand was a backwater of the Spanish empire, undeveloped. The Spaniards were far more interested in exploiting the resources of Peru and Mexico than what would become the DR. Though slavery was legal in what would become the Dominican Republic it was not as central to the economy as it was in Haiti.
These initial difference would affect the development of both countries even after they became independent and even after some of the extractive institutions (i.e. slavery) where abolished. Slavery and the extractive institutions that replaced them in Haiti discouraged savings and investment to a greater extent than in the Dominican Republic.
2. Haiti was an example that potential trading partners of Haiti did not want to encourage. Black slaves rising up, killing their masters and starting a republic...not something that Europe or slave owners in the US wanted to encourage.
Even after slavery was abolished it's not like racism magically disappeared.
In the 20th century there would be more prosperous countries with black majorities but by the time these countries became independent the attitude of European countries and the US had been influenced by the Second World War and the Cold War. Neither Europe nor the US wanted to antogonize the non-white countries of the newly independent Third World.
3. Haiti is a country where the overwhelming majority speak Creole and a small minority speaks French. It's isolated from its neighbors who speak English and Spanish.
4. The Dominican Republic, has followed better policies and has had more stability than Haiti, at least going back to 1960. These is an important factor but it is not isolated from the other three factors.
"But how to get a country to collectively decide to pursue growth — and the political stability and smart policy required for that growth — is a harder question entirely".
China post 1990?
I'm kind of surprised you didn't mention Daron Acemoglu's hypothesis from why nations fail. He makes the argument that Haitian colonial rule was more extractive than DR's, and that even after liberation Haiti failed to establish inclusive institutions. Acemoglu contends that extractive institutions can be as efficient, or more efficient, than inclusive institutions up to a point (South America was wealthier than North America 'til 1800 an onwards for example). In the case of Haiti vs DR the 1960s was the point at which the competitive advantage of DR's more inclusive institutions became apparent.
http://whynationsfail.com/blog/2012/4/3/why-is-haiti-so-poor.html
Having looked some more, I don't really see much of a divergence in 1960. DR's GDP/cap in 1960 was already about 3x that of Haiti, it's just that the handles on the hockey sticks always look small when you zoom out far enough.
Check out GDP/cap in Haiti and DR from 1960-1970: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=1970&locations=DO-HT&start=1960
The 10-year-average GDP growth/cap (annual %) between 1961-1970 for DR was 2.91%, whereas for Haiti it was -1%: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=DO-HT
DR has just been pulling away from Haiti pretty consistently since 1960, and still are. The difference in 1960 was already quite substantial, in fact it's the same as the difference between Spain and Mexico today. And as Guy mentioned in the comments; DR had 10 years greater life expectancy than Haiti by 1960 - Spain's life expectancy is 8 years greater than Mexico's.
So I'm mostly leaning towards this great divergence between Haiti and DR in 1960 actually not being thing. For all we know it may have taken DR 100 years by 1960 to triple their GDP relative to Haiti, and the true divergence in DR's GDP trajectory was sometime in the 1800s...
I would suggest metals extraction has had an influence. First nickel mining contributed almost 50% of gap as nickel mining declined gold mining began which quickly took over, again contributing almost 50% to the gdp.
I guess my question is more about morality than economics, but it would seem at first blush that France clearly owes Haiti reparations. But if France were to pay such reparations then most or all of it would end up in some gangster’s bank account in the caymans. So France seems to have a duty to pay, but this could easily make the world worse off. What then should France do?
The photo contrasting the two sides of the Haiti-DR border is a really stark contrast. But I'm not sure the deforestation is the biggest difference. The DR side isn't actually that heavily forested either. It's more like savannah or scrubland, like Southern California, with low bushes on the hilltops and sides, and trees in the creases between hills where water flows. Instead, I think the biggest contrast is that the Haitian side appears to be overgrazed (with cattle? I don't know what animals they raise there). Notice all the little paths covering the hillsides on the Haitian side, which I think are probably made by livestock. Notice also that even the grassy or low bush areas on the DR side have more plants growing on them. I bet no one is cutting down grass or bushes for wood or even firewood, and they aren't going around mowing it with a lawnmower either. Again, I think it was livestock that mowed all those bushes down.
You see this contrast in the ranching areas of the Western US too, where low grass on areas used as pasture can contrast with scrub and sagebrush on adjacent lands that aren't grazed by cattle.
Is this representative or related to the growth rates? Maybe DR agriculture was always tilted toward more cash crops and less livestock, which created a virtuous cycle against deforestation and decreasing soil quality.
One thing to consider is that DR basically took over Cuba’s exports after the Cuban revolution. Stealing brand names of cigars and rum fairly flagrantly to exploit the embargo. This was around the time of the divergence. It’ll be interesting to see what happens if embargo ends someday.
Was the “Macroeconomic section” supposed to end mid-sentence after “Personally, I think”? Is this a subtle nod to the lack of definitive answers, or just a snafu?