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• 1 media/GDP.jpg 2022-03-08T09:58:20-08:00 Explaining the Differences in Both Economies 13 Why So Different? plain 2022-03-09T22:59:27-08:00
  While it’s not impossible for a country to turn its economic fortunes around (as illustrated by the Taiwan and South Korean examples) it’s clearly more difficult in practice than theory. Developing countries all over the world have tried to replicate the East Asian success stories but to no avail. So how can Haiti succeed where seemingly everyone else has failed? 
  
  In short, institutions. Quite often the most overlooked pre-requisite to economic success, and in my opinion, the reason why there are still developing countries in the world. The article mentioned on the previous page notes two important initial conditions that the South Koreans and Taiwanese had over the rest, “high levels of education attainment relative to income, and equal distribution of income and wealth” (Rodrik 97). It may seem overly simplistic, but these two conditions almost always induce political stability and economic success. High levels of education relative to income ensures that the working population is productive and smart enough to push the country forward. They will be able to handle the expansion of the economy and adapt to the changes associated with it. Income and wealth equality ensures that the population is equally invested in its future success and that everyone will be able to share in the gains. Smart people don’t usually work for free, so it’s imperative that people know they will be rewarded for their hard work. This condition also reduces the incentive for corrupt politicians and governments. Nobody can afford to pay officials off, and those in office know they have to perform, or they’ll be voted out. 
  
  Creating these conditions won’t happen overnight, but they will give Haiti the best chance to dig themselves out of their enormous economic hole. The good news is that organizations like the World Bank and the UN support governments and countries trying to improve their institutions, so Haiti isn’t alone in the fight. Once the core issues of inequality and corruption are fixed, the incentives will be in place for economic growth to flourish. Haiti should leverage their relationship with Taiwan to learn from their success and follow their path to economic stability.