Yesterday I explained how a nation’s political system
determines the economic future of that country. Every sovereign government can
take one of two paths with regard to its economic future; a nation can provide
an open playing field, allowing competition and the competitive process to take
place, or a nation can design an economy that will function to benefit a
particular market or industry. In order for a nation to provide an open
economic and social playing field, it must create an equitable and fair legal
system, allow for competition rather than favoritism, protect property right,
sponsor infrastructure and public goods, and prevent monopolies and cartels
from having too much market influence. This is usually called pluralism, and
the types of institutions that embrace pluralism are described in the book Why Nations Fail as inclusive
institutions. If a nation does not take the path of pluralism and sponsors one
particular industry, it may have a short period of growth, but will not achieve
any real economic growth in the long term. These governments are described in Why Nations Fail as extractive because
they extract wealth from one group and distribute it to another group. Usually
(but not always) the nation’s rulers are also those at the forefront of the
economy, and design the economy to benefit them. This not only causes great
poverty, but in many cases can denies people fundamental rights to land,
liberty, and property.
Considering how governments can shape their economies, and
many times shape their economies to keep a small elite group in power at the
expense of the rest of the society, Haiti’s political history begins to explain
its current state of dismal poverty. As a Spanish and French colony, Haiti was
a prime example of an extractive institution. The society was designed to
benefit the elite class of white plantation owners at the expense of the African
slaves brought to Haiti. Before the Haitian revolution, less than 10% of the
Haitian population was white. At first the Haitian economy grew thanks to the
large French investment into the plantation system, but that growth soon began
to dwindle once all of the farm land was occupied by plantations. Even though
new technology could have benefitted the entire economy as a whole, it would
have meant that a new group of people would have risen and displaced those
currently occupying power, the White plantation owners. The French plantation
owners did not want any threats to their power, so they resisted implementing
any new technology in order to keep their firm grip on the economy.
When the French were overthrown in 1804, most either left
the island or were killed. This created a power vacuum. The leaders of the
revolution who filled this vacuum were apart of a relatively small class of
educated Haitians. Many of these Haitians were of mixed race, the children of
French men and their slave mistresses, and they were put in charge of the
day-to-day operations of the plantations. The new elite class of Haitians, lead
by Jean Jacques Dessalines, wanted to overthrow the French and end slavery, but
they did not have any intention of ending the plantation system. At this time,
goods produced in tropical climates, namely sugar, was extremely profitable, and
the new rulers of Haiti wanted to be at the forefront of this trade, hoping it
would propel Haiti into as a world super power. They were also, with the French
plantation owners gone, in charge of many of the large plantations and greatly
benefitted from keeping the plantation system intact. This system came to be
known as the fermage system, and did help
Haiti attain some wealth, but most of which was unfortunately enjoyed by a
small elite at the expense of the majority of Haitians. This system did not
promote the development of property rights of any pluralistic institutions that
would have created an even playing field.
In 1825, the France sent a team of diplomats in to negotiate
with then President of Haiti Jean Pierre Boyer. The negotiation focused on an
indemnity that France felt entitled to by Haiti. Though France had lost the
Haitian Revolution, they asked Haiti to repay the French for the profits lost
from the slave trade. Their argument was not very solid, but the French
battleships parked outside of Port Au Prince were, so Haiti ended up signing
the treaty. This is the only time in history when the victors of a war pay an
indemnity to the vanquished, but the French managed to negotiate a loan of 150
million Francs from Haiti. This loan was a quite onerous on Haiti and was paid
by Haiti for the next seventy years, many times consuming over 50% of Haiti’s
public expenditures.
Throughout the 19th century, Haiti had two
extractive forces working against its development: the semi feudal land
arrangement that aimed at boosting farm production at the expense of the rural
Haitian peasant, and the debt to France. Needless to say this created an
unstable environment that saw one government topple after another. Governments
rose as quickly as they fell, and there was no effective rule of law or
enforcement of property rights. In one twenty year period in the middle of the
century, the governments was toppled over twelve times. In order for a society
to prosper, the government has to provide certain services (for starters they
need to provide a reliable police force and a fair judicial system) that would benefit
the whole society. Some extractive governments don’t implement these services
because it would cause a threat to your rule (it’s a lot easier to rule when no
one can sue you in court). In Haiti’s case the government didn’t resist these
policies as much as they never really had a chance to implement them due to the
continuous political upheaval. This political upheaval continued until 1915, when
the US Marines began their occupation of Haiti that would last until 1934.
Though this did end the continuous intimidation from different European powers
as well as the continuous political upheaval, it did not promote the
development of the Haitian legal system, forcing those Haitian peasants to be
without property rights or any of the other legal utilities that foster a
growing economy.
Once the Marines left, there was hope for Haiti. There was
hope that finally, after over two hundred years of instability, Haiti could develop
a government that would promote the general interests of the Haitian people,
and allow for Haiti to begin on the path to creative destruction and increased
prosperity. The hope came in the form of Dumarsais Estimé, who was president of Haiti from 1946 to
1950. Estimé looked toward economic liberation, and attempted to remove the
American corporations that held too much political sway in Haitian government.
Estimé’s policies, however noble, were overturned. President Rafael Trujillo,
the then president and brutal dictator of Dominican Republic worked with
Haitian military to unseat Estimé, who was eventually exiled to
Paris in 1950.
This
chaos prevented the attempts at economic liberalization and hampered any
attempt to implement a fair and equitable legal system that could foster
economic development. The chaotic state of Haitian politics made room a
dictator to come forth, someone to rise from the ashes and grip Haiti with an
iron fist. That leader came in 1957 in the form of François
Duvalier, better known as "Papa Doc". Duvalier had served under Estimé as
a Physician, but was also very involved in public discourse and was known for
his influential editorials. Duvalier came to the presidency with high hopes but
ended up being on of Haiti’s most brutal dictators. Duvalier saw himself as the
embodiment of all things Haitian, and created a personality cult around him to
whom he delegated state power. Duvalier set high taxes on the general
population in order to fund his massive police force, the TonTon Macoutes. The
TonTon Macoutes terrorized all of Haiti and prevented any force from rising
that would have challenged Duvalier’s rule. All those who opposed Duvalier were
imprisoned or tortured by the TonTon Macoutes. The only power in the state was
that held by Duvalier. In 1971, Duvalier died in office, and his then nineteen-year-old
son Jean-Claude Duvalier became president. Jean Claude, called “Baby Doc”, ruled
with the same iron grip as his father, working only to keep himself in power,
and intimidating the rest of Haiti with the TonTon Macoutes. Pope John Paul
came to Haiti in 1983 and actively spoke out against Baby Doc. In 1986, Baby
Doc was thrown into exile.
In a state of flux, Haiti saw the rise of the
charismatic priest named Jean Bertrand Aristide. Aristide came out of the
tradition of liberation theology and, in February of 1991, became Haiti’s first
democratically elected president. This was a short lived presidency however
because Aristide was overthrown in a coup d’etat in September of 1991. Aristide
resumed his presidency from 1994-1996, and was then elected again in 2001. In
2004 Aristide was thrown out of power during another coup d’etat and exiled to
Africa. The history surrounding Aristide is a mixed history, some claim that he
was the savior of Haiti unfairly ousted from power, while others feel that he
was equally as corrupt as previous heads of state. Regardless of what
historical perspective you examine Aristide’s presidency from, there was little
development of any pluralistic institutions during Aristide’s presidency, and
today Haiti remains still quite poor.
So where is Haiti headed now? Is the President of
Haiti, Michelle Martelly, a reformer who will set Haiti on a course towards
pluralism and prosperity, or is he another dictator looking to just maintain
his own hold on power? Martelly was elected in 2011 so time will tell if he can
help Haiti develop the needed political institutions to sponsor growth, but I
can’t help but be a little positive about his prospects. Martelly has been a
champion of education, a resource necessary for any type of national
development. Martelly has specifically focused on vocational education,
something I am also quite invested in as well. Martelly has proposed a tax on all
remittances that will go directly to sponsor education. Martelly has also
worked very hard to develop Haiti’s infrastructure. The road outside of the
mission has been greatly improved since I’ve been here, and there is now a
paved road that leads to the mountain community of Paul that wasn’t here when I
was first in Haiti last January. Once of the principal contractors for all of
this work has been Estrella, a Dominican construction company. Though this
means that some of the government expenses on the road construction will leave
the country, it also means that Martelly is contracting the work out to the
best firm available rather than his good friends firm. A few months ago there
was a kidnapping ring that was broken up and some of those involved were members
of an extremely wealthy Haitian family. Though the family was one of Haiti’s
ruling elite, they were still brought to justice.
Now to be fair, all of these signs point in one
direction, but Haiti still has many hurdles to clear before it is set on a path
to prosperity. For starters, Haiti has to figure out a way to issue property
rights to the rural communities. Haiti also has to establish a legitmate police
force, something that takes years to do. Even if Martelly is honest and really
wants to implement a pluralistic and inclusive form of government, he has to
remain in power long enough to implement these changes. President Dumarsais
Estimé fought a similar fight that Martelly is fighting, but his presidency was
cut short when the Dominican Republic overthrew him. One cultural force America
has benefitting it is the incredible high regard we have for the US
constitution. Senator Rand Paul willing to filibuster for thirteen hours on the
suspicion that the constitution was being violated. Haiti’s history of
dictatorship toppling dictatorships does not have this cultural value. Haiti’s
future is uncertain. They certainly appear to be pointed in the right
direction, and since they have nowhere to go but up, I can’t help but be
optimistic.