Economic Growth and Decline in Comparative Perspective: Haiti and the Dominican Republic, 1930-1986

Abstract

INTRODUCTION Since 1960, real output per-capita in the Dominican Republic has increased three-fold, while in Haiti real output per-capita has declined by half. Haiti's fifty-year-long economic decline may lead the casual observer to assume that Haiti has always been the poor economic performer and the relatively unstable country when in fact, before 1960, Haiti's per capita income was higher than the Dominican Republic's and, for the first 70 years after its independence, the Dominican Republic was the more politically unstable nation. This paper will argue that the sharp contrast in economic performance between two countries was rooted, not in immutable factors such as geography, the weight of history, or climate, but originated in the varying impacts of the rent-seeking strategies of the ruling elites in the Dominican Republic under Rafael Trujillo (1930-1961) and in Haiti under Francois and Jean-Claude Duvalier (1957-1986). The study will first review the literature on Haitian-Dominican divergence and argue that most explanations for divergence, whether sourced in variations in population density, climate, history, or economic policies, are either incorrect or incomplete. After surveying the literature on the topic, the paper will show that the period from 1930 to 1965 was of central importance because it was during this era that political-economic dynamics that produced divergence first emerged; in short, the first sharp differences between Haiti and the Dominican Republic, those crucial to their longrun growth paths, first appeared in Haiti under the Duvaliers and in the Dominican Republic under Trujillo. Finally, the study will describe and contrast the rent-seeking strategy of Trujillo with that of the Duvaliers and argue that these differences were crucial to determining the long run growth paths of each nation. LITERATURE REVIEW The literature that attempts to explain the economic divergence between Haiti and the Dominican Republic can be categorized by argument. The first set of arguments are ecological explanations for anemic growth in Haiti; an example of this type of argument is found in Diamond (2005) which points to the catastrophic deforestation in Haiti and contrasts this with the comparative ecological health of the Dominican Republic and argues that the contrast can be explained by reference to Haiti's larger population and the Dominican Republic's higher levels of rainfall (Diamond 338). The first weakness in the ecological argument is that there is little evidence that mean annual rainfall differs between Haiti and the Dominican Republic. According to a 1941 study which compares mean annual rainfall across the island of Hispaniola, there is no significant difference between rainfall levels in Haiti and the Dominican Republic (Alpert 201-204). Even if low rainfall were the problem hampering agricultural productivity in Haiti, low rainfall did not keep Haiti from becoming the most productive sugar-growing region in the French Empire in the eighteenth-century. The second weakness in the ecological argument is that overpopulation and deforestation appear to be relatively recent phenomena in Haiti. In 1960, for instance, the amount of arable land per person in Haiti and the Dominican Republic were roughly equivalent at 4.3 persons per hectare of arable land in Haiti versus 4.65 persons per hectare of arable land in the Dominican Republic. Figure 1 shows that population per hectare of arable land has been quite similar throughout the recent history of Haiti and the Dominican Republic, but that prior to 1972 the Dominican Republic had a higher population density relative to its stock of arable land, and beginning in the late 1990s, its population density per hectare of arable land had, once again, caught up with Haiti's after falling behind in 1972. Also important to note is the fact that high population density is neither a necessary, nor sufficient condition for poverty or environmental degradation; in fact, six out of the eleven richest countries in the world (Hong Kong, Singapore, Malta, Mauritius, South Korea, and Japan) have higher population densities than either Haiti or the Dominican Republic and the nine nations with the lowest growth rates in the world from 1960 to 2005 (Guinea Bissau, Nicaragua, Liberia, Madagascar, Democratic Republic of Congo, Zambia, Somalia, Niger, and the Central Africa Republic) all had much lower population densities than either Haiti and the Dominican Republic. …

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