Haitian Economics

Image by United Nations Development Programme via Flickr

With the relief effort in Haiti well underway, I think it's a good idea for us to remember that things in Haiti were pretty terrible before the earthquake, and to consider the reasons why.

Big Government pretty well sums it up with a headline: "Earthquakes Don't Kill Haitians--Underdevelopment Does."  Rich countries have earthquakes too, including the richest state in the richest country.  But the worst of those have death tolls in the dozens, not in the scores of thousands.  Rich countries can afford to build buildings that don't collapse into powder; rich countries can afford to have building inspectors that do their jobs; rich countries can afford to have first responders with medical equipment and heavy machinery, and the training to use them.

I'm not saying this to say, "Hey, we're rich, so we're better than Haiti."  I'm saying it to point out that widespread, consistent economic prosperity can solve a lot of problems, and can prevent a lot more from happening in the first place.

By all rights, Haiti should be a paradise: like any other Caribbean island, it has great weather, beautiful scenery, lots of beaches, and blessed proximity to one of the richest nations in the world.  So why is Haiti less like Grand Cayman and more like a bad neighborhood in Zimbabwe?  The short answer is: their leaders have failed them.

So one way to account of Haitian poverty is to look at the effectiveness of that country's institutions. The World Bank's Worldwide Governance Indicators rate the quality of variety of institutions in each country on a scale of 1 to 100 - 100 being the best. How does Haiti do?

Voice and Accountability (free press and democracy): 27 (U.S. 86)
Political Stability/No Violence: 11 (U.S. 68)
Government Effectiveness: 9 (U.S. 93)
Regulatory Quality: 19 (U.S. 93)
Rule of Law: 6 (U.S. 92)
Control of Corruption: 7 (U.S. 92)

Emphasis mine. The way to rebuild Haiti is not to dump planeloads of foreign aid money on them (although in the short term, foreign aid money in the form of food, medicine, and army engineers is exactly what they need).  Any money lying around will just get sucked up by whatever kleptocrat happens to be in charge that day.  Here's Ben Sanders in Reason:

Whatever Haiti's problems (and they are considerable), appointing a benevolent foreign overlord is a good recipe for keeping it dependent on international assistance for years to come. Even an overlord as benevolent as Bill Clinton will never have the understanding of Haitian society that locals would bring to the job, nor would he be even remotely accountable to the people he was attempting to assist.  A wiser path would be to keep the international footprint as small as possible—especially once the initial emergency relief stage is over—and help Haitians themselves step up to rebuild the country.

 Yegzactly.  What they need for rebuilding are the stable institutions and rule of law that makes people want to build for themselves.  It feels good, and in many ways it seems like the Christian thing to do, to just give a whole bunch of money.  But just because it feels good doesn't mean it's the best thing.  Think Christian cuts to the heart:

This disaster in Haiti is worthy of a lament and the Bible is very clear on God’s concern for the poor and the oppressed and our obligation to help. Sorrow and despair will quickly be joined by anger. The Bible is also clear on God’s judgment against evil and his intent and means of ending the age of decay. Do we in this moment not feel angry about international structures that reward powerful nations and deprive the poor ones? Do we in this moment not recognize that judgment is due to those who steal development money or take bribes to subvert building codes or fail to establish social frameworks that could have moderated what we see taking place? Biblical writers were no strangers to the magnitude of suffering and disaster we see splashed across our TV screens. All of this is part of what Jesus came to conquer.

We ought to give. We ought to lament. We ought to know that we are part of the problem here too. We ought also to know that our sin and consequence are not dispelled by good intentions or redoubled commitment to do better next time. We stand before a beast of our own making the remedy of which is beyond us. When we come to recognize that we begin to take some first hopeful steps of confession, repentance, participation and rescue by another who is also one of us.