Why Some Countries Struggle

Just as important as understanding the factors that cause nations to flourish is discerning the circumstances and decisions that lead them to fail.

Haiti is today the poorest country in the Western Hemisphere, with nearly 50% of its population living below the poverty line. Years of corruption and mismanagement were exacerbated in 2010 by a devastating earthquake.¹ A history of political instability was punctuated by the president’s assassination in 2021.

Today, the question is less about growth and more about how to protect the country from roving gangs.²

It was not always this way. Haiti was the wealthiest colony in the Caribbean; while exploitative and reliant on slave labor, it also had infrastructure and expertise to support large scale agriculture as a free nation. Haiti’s independence in 1804 following a successful slave revolt marked an historic moment in the world.

The question is, what are the factors that doomed Haiti’s transition from colony to independence, and what lessons can be gleaned?

Brief History of Haiti

The Caribbean island of Hispaniola, initially populated by Tainos, was introduced to Europeans through Christopher Columbus in 1492. It was initially colonized by Spain who sought gold and other resources. Less than 60 years later, the Tainos had succumbed to disease and violence.³

At the close of the 17th century France established its colony, Saint-Dominigue, on the western side of the island.

Under French control, Saint-Dominigue transitioned to an agriculture model and achieved large scale production of coffee and sugar. At its height, it produced 60% of the world’s coffee and 50% of the world’s sugar.⁴ To support its large economy, France imported 800,000 slaves from Africa, double the number brought to North America.⁵ Conditions were brutal and average life expectancy for a laborer was 10 years.⁶

Sugar is lucrative but is also expensive to produce, and so the colony consolidated large plantations to achieve economies of scale. These were filled with advanced crop equipment such as mills, aqueducts, and advanced irrigation systems. Similarly, the slaves working the sugar plantations were highly skilled in their craft.⁷

Inspired by the American and French revolutions, in 1791 the slaves revolted against their French owners. They shockingly won independence in 1804.⁸ It was a remarkable moment. This was the first successful slave revolt, and the freed people renamed their country Haiti, with it becoming the world’s first black republic.

Understanding Haiti’s Failure to Rise

Haiti never transitioned to a prosperous independent country. Among the factors to stymie its successful transition, three stand out: a costly reparation payment to France, lack of an economic model, and failure to build political institutions.

A Costly Reparation Payment to France

After independence, Haiti was isolated. France refused to recognize it; same with Britain and the US, fearing uprisings among their own slave populations.

In 1825, while threatening renewed war, France finally agreed to recognize Haiti if it received reparations. The new nation agreed to pay France the amount of 150 million francs. These payments crippled the country’s finances.

In 1838 France and Haiti renegotiated the payment down to 60 million francs, equivalent to $21 billion in today’s dollars.⁹ This amount is larger than Haiti’s total GDP today of around $20 billion.¹⁰ Still, these payments comprised 80% of Haiti’s budget for many years and it only repaid all loans related to the scheme in 1947.¹¹

The detrimental impact of these reparations and Haiti’s diplomatic isolation were huge. Haiti could not invest in its own development — infrastructure, schools, health, and the economy — which had crippling downstream impacts on political stability.

Lack of an Economic Model

Academic literature shows a strong correlation between a growing economy and stable democratic government.¹² Haiti needed to rebuild its economy following years of war.

After a failed attempt to revitalize the plantation system that had provided so much profit to the colony, the new Haitian government ultimately chose to break up the large plantations to redistribute land to former slaves at below market prices, in small plots. This meant Haiti could no longer support large scale sugar production.¹³

Small farmers converted their newly purchased land to coffee farms and sustenance farming. This meant Haiti had less value to trade on the global market. So whereas the rest of the world benefited from the industrial revolution, Haiti actually experienced a period of deindustrialization.¹⁴

Simultaneously, the government implemented draconian land laws. Scholars point to two in particular: complex inheritance laws and a ban of foreign ownership of land.¹⁵

Regarding inheritance, Haitian law required property owners to divide land equally among heirs. A farmer could not sell unless he received approval from the entire family. This made consolidating plots exceedingly difficult.

Haiti feared outside countries trying to reassert control, and so designed these laws as a measure of protection. This fear was logical. The US only recognized Haiti in 1862.¹⁶ In 1868, President Johnson considered annexing the island, and the US did eventually invade and control Haiti from 1915 - 1934.¹⁷

But the unintended consequence of these laws was to also make land ownership inflexible to changing economic conditions. The early 20th century saw a boom in sugar demand of which many Caribbean islands took advantage. But not Haiti.

Inheritance laws made it nearly impossible to reconsolidate small farms to achieve the economies of scale needed to produce sugar, and bans on foreign ownership prevented Haiti from receiving much needed foreign investment.

As a result, by 1950, islands such as Puerto Rico, Dominican Republic, and Jamaica all saw material increases in sugar exports, while Haiti did not.¹⁸

All this put Haiti at a disadvantage. Each year 100,000 Haitians went to Dominican Republic to work sugar plantations, and between 10,000 - 25,000 traveled to Cuba; they could earn 2 - 6 times the wages in Haiti. These two countries employed about 20% of Haiti’s prime-age (25 - 55) male workforce.¹⁹

Failure to Build Political Institutions

The leaders of Haiti in 1804 needed to build political institutions from scratch. There were no social or economic structures, no education, and the nation was populated by former slaves — many of whom were illiterate — who had no experience or knowledge of how to build a functioning democracy.²⁰

The first few years of Haiti’s independence were marked by fledgling attempts at representative democracy that did not launch. The first elected leader in 1805, Jean-Jacques Dessalines, named himself Emperor of Haiti and was assassinated two years later. In 1806, Henri Christophe was elected following the establishment of a new constitution. Christophe found his powers too limiting and so fled to the northern province, drafted a new constitution, and named himself President for Life.

Christophe was impeached and Alexandre Petion was elected. Following Petion’s reelections in 1811 and 1816, a new constitution was agreed which gave the president the power to be elected for life and nominate his successor.

This vacillation between elections and autocracy has continued throughout Haiti’s history. Subsequent rulers viewed leadership positions as ways to advance their own social status and wealth, and appealed only to their own small constituency.²¹

Takeaways for Today

Ultimately, Haiti failed to transition to a successful democracy because it faced a near impossible situation: diplomatic isolation and continued exploitation by the French long after it gained independence; a decimated economy impeded by policy decisions to protect it from external takeovers that hurt long term growth prospects; and leaders with no experience in self-government struggling to build political institutions.

Nevertheless, the International Monetary Fund noted that, by 1960, Haiti’s per capita GDP was roughly similar to that of its neighbor, the Dominican Republic. Haiti’s has since remained stagnant whereas Dominican Republic’s has soared.²²

The IMF argues that the differing growth rates should be attributed to post-1960 policies, as they both faced similar historical conditions leading to 1960 including intense political instability, violence, economic collapse, and poor institutions.

For example, between independence in 1804 and the US military occupation in 1915, Haiti had 33 leaders with an average time in power of 3.4 years. Meanwhile, between independence in 1844 and US military occupation in 1916, Dominican Republic had 61 leaders with an average time in power of 1.2 years.²⁴

The authors point to certain new factors in post-1960s Dominican Republic: greater political stability, more access to education, growth of private credit markets, and trade and economic liberalization programs.²³

What the IMF study shows is that — 220 years after Haiti achieved independence — perhaps it is not too late for it to make changes to improve its trajectory.

For the sake of Haitians, we should all hope that it does.

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1  “Council on Foreign Relations. "Haiti’s Troubled Path to Development." CFR.org, https://www.cfr.org/backgrounder/haitis-troubled-path-development. Accessed 14 Jan. 2025.

2  Ahmed, Azam. "In Haiti, Gangs Rule Amid Massacres and Murders." The New York Times, 6 Jan. 2025, https://www.nytimes.com/2025/01/06/world/americas/haiti-gang-massacres-murders-instability.html. Accessed 14 Jan. 2025.

3  University of Kansas Haitian Studies Institute. "Haiti: A Brief History of a Complex Nation." https://haitianstudies.ku.edu/haiti-brief-history-complex-nation. Accessed 14 Jan. 2025.

4  University of Oregon Scholars' Bank. "Content from Scholars' Bank Repository." https://scholarsbank.uoregon.edu/server/api/core/bitstreams/062a6a80-dee0-42d9-aa62-4aab6f0d36fc/content. Accessed 14 Jan. 2025.

5  Slavery and Remembrance. "The Haitian Revolution." https://slaveryandremembrance.org/articles/article/?id=A0111. Accessed 14 Jan. 2025.

6  Military Medicine. "Failure to Plan: The Disease That Cost an American Empire." Military Medicine, vol. 188, no. 7–8, 2023, https://academic.oup.com/milmed/article/188/7-8/171/7165307. Accessed 14 Jan. 2025.

7  University of Oregon Scholars' Bank. "Content from Scholars' Bank Repository." https://scholarsbank.uoregon.edu/server/api/core/bitstreams/062a6a80-dee0-42d9-aa62-4aab6f0d36fc/content. Accessed 14 Jan. 2025.

8  Ibid.

9  Council on Foreign Relations. "Haiti’s Troubled Path to Development." CFR.org, https://www.cfr.org/backgrounder/haitis-troubled-path-development. Accessed 14 Jan. 2025.

10  World Bank. "Haiti | Data." https://data.worldbank.org/country/haiti. Accessed 14 Jan. 2025.

11  Council on Foreign Relations. "Haiti’s Troubled Path to Development." CFR.org, https://www.cfr.org/backgrounder/haitis-troubled-path-development. Accessed 14 Jan. 2025.

12  Lagrenade, Jessica. "Democratized Republic: How Haiti’s Failed Emigration Program Destabilized its Democracy." Master’s thesis, Georgetown University, 2012. Georgetown University Institutional Repository, https://repository.library.georgetown.edu/bitstream/handle/10822/557767/ Lagrenade_georgetown_0076M_11617.pdf?sequence=1&isAllowed=y. Accessed 14 Jan. 2025.

13  University of Oregon Scholars' Bank. "Content from Scholars' Bank Repository." https://scholarsbank.uoregon.edu/server/api/core/bitstreams/062a6a80-dee0-42d9-aa62-4aab6f0d36fc/content. Accessed 14 Jan. 2025.

14  Ibid.

15  Palsson C. Small Farms, Large Transaction Costs: Haiti’s Missing Sugar. The Journal of Economic History. 2021;81(2):513-548. doi:10.1017/S0022050721000139.

16  U.S. Department of State. "World War I and the Department." https://2001-2009.state.gov/r/pa/ho/time/wwi/88275.htm. Accessed 14 Jan. 2025.

17  Rosenwald, Michael S. "When the U.S. Occupied Haiti: A Century-Old Chapter Sheds Light on Today’s Turmoil." The Washington Post, 6 Aug. 2021, https://www.washingtonpost.com/history/2021/08/06/haiti-us-occupation-1915/. Accessed 14 Jan. 2025.

18  Palsson C. Small Farms, Large Transaction Costs: Haiti’s Missing Sugar. The Journal of Economic History. 2021;81(2):513-548. doi:10.1017/S0022050721000139.

19  Ibid.

20  Lagrenade, Jessica. "Democratized Republic: How Haiti’s Failed Emigration Program Destabilized its Democracy." Master’s thesis, Georgetown University, 2012. Georgetown University Institutional Repository, https://repository.library.georgetown.edu/bitstream/handle/10822/557767/ Lagrenade_georgetown_0076M_11617.pdf?sequence=1&isAllowed=y. Accessed 14 Jan. 2025.

21  Ibid.

22  International Monetary Fund. "Article: A Decade After the Crisis." IMF Economic Review, 2009, https://www.elibrary.imf.org/view/journals/024/2009/002/article-A004-en.xml. Accessed 14 Jan. 2025.

23  Ibid.

24  Ibid.