Haitian Business Elites and Their Consequences for Development

The research identifies which Haitian institutions contribute to underdevelopment by limiting access to international trade, and aims to study how these restrictions affect the distribution of gains from trade throughout Haitian society.

Haiti today has 65% of the population under the poverty line, yet quantitative research on the causes of Haitian poverty is sparse, and tends to focus on the "proximate sources" of underdevelopment such as environmental decay or lack of education, while institutional and political factors have received little or no attention. This project examines the political economy of underdevelopment in Haiti. The researchers conjecture that restricted access to international trade opportunities is a key component to Haitian underdevelopment, and seek to identify which institutions of the Haitian economy limit access to international trade, and how this affects the distribution of gains of trade throughout Haitian society.

A large body of research has documented the importance of social connections and networks in supporting business development and access to international markets. Through this study, the team aims to understand how social networks support the creation and growth of businesses in Haiti. The project connects sociological and case study knowledge about the importance of social networks with research methods on firm-level performance more common in economics and development studies. Using different surveys of Haitian firms, the researchers will calculate network statistics (such as degree clustering) at the firm level, and use this data to estimate the impact of social connectedness on firm-level outcomes such as access to trade, profitability and price margins on imports and exports.

During the first period of the project the researchers have secured a large amount of observational data on social networks, business ownership, investment, and international trade in Haiti. The team’s fieldwork in Haiti provided additional insight into the empirical strategy that they are now in the process of using to quantify the value of relationships for business success.