Indian Journal of Economics & Business, Vol. 11, No. 1, (2012) : 89-105
CELYSE WELLER *
Abstract
In economics, most models and theories are numbers oriented; however there are a few models that indulge a more sociological approach to looking at the ways development does or does not come about. By looking at the Neocolonial Dependence
Model and the False Paradigm one hopes to understand the different roads to development that Haiti and the Dominican Republic have taken. These two ideas, while necessary to have the knowledge of, do not completely explain why Haiti is less developed than the Dominican Republic. A better approach would be to look at political institutions and structures of each country.
I.
INTRODUCTION
The issue of economic development is one that requires many different points of view. One cannot assume that looking only at economic data can benefit the developing world or serve a greater purpose. There are many complexities when looking at Less Developed Countries (LDCs) that include agricultural, social, political, and historical aspects. I have chosen to look at the development of two very similar but dissimilar countries, Haiti and the Dominican Republic. While they have similar climates, are roughly the same size, and have similar resources they are very different when looking at their economic development. I will use the
Neocolonial Dependence Model along with the False Paradigm to analyze the processes and outcomes of the road to development for these two countries. I believe the Neocolonial Dependence Model combined with the False Paradigm can help explain and address issues that incorporate more than just the economic data of a country.
To begin with, a simple definition of the Neocolonial Dependence Model and the False Paradigm are needed. The Neocolonial Dependence Model is a way of
* 2475 South York St. #201, Denver, CO 80210, Graduate Student, Josef Korbel School of International
Studies, E-mail: Celyse.Weller@du.edu

90 Celyse Weller explaining underdevelopment with regards to historical factors and the influence that developed, capitalist countries from the center have on the less developed countries in the periphery. The basis of this model stems from the Marxist tradition and plays off the North versus South idea where the Northern, rich countries have the power and capital to influence the Southern, poor countries (Todaro and Smith,
2012). While the Neocolonial Dependence Model is the main model I will be working with, the False Paradigm plays an important role in highlighting the lens used by developed countries and aid agencies when viewing the periphery.
The False Paradigm asserts that while many aid agencies and donor organizations from developed countries offer what may be well intentioned and what they believe as helpful advice and actions, they may not have the right perspective when dealing with issues of economic development in LDCs (Todaro and Smith, 2012). Many times the perspectives are coming from people who have lived in developed countries and are well educated which leads to the efforts of aid agencies serving the interests of the elite rather than the poor.
The Neocolonial Dependence Model and the False Paradigm provide a framework for economists to look at more than just economic data. However, it does not appear to be the best model to apply to Haiti and the Dominican Republic.It
looks as if the national political history has had much more influence over why development has or has not occurred in each country. That is not to say that the
Neocolonial Dependence Model and the False Paradigm cannot shed some light on the current situations. It is now necessary turn to a more in depth look at the foundations of the Neocolonial Dependence Model and the False Paradigm to understand why they are not the most useful concepts in evaluating the development of Haiti and the Dominican Republic.
II. THEORETICAL SECTION
The Neocolonial Dependency Model has four main points that try to help explain the relationship between the underdeveloped countries and the developed countries.
1. There is a center-periphery relationship due to the political and economic power held by the developed countries over the underdeveloped countries.
2. Many thoughts held by classical theorists cannot apply to the countries in the periphery.
3. The countries at the center know they can gain from the countries in the periphery and do in fact gain regardless of the cruelty as a result.
4. The disbursement of income and wealth is extremely unequal and the wealthy keep it for themselves rather than investing in development. (Tansey and Hyman, 1994).
Dependency theorists use these four points to help boost the rationality of the model. They claim that the exchanges between developed and underdeveloped countries always occur on unequal terms. The developed countries use their economic

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
91 and political power to exact what they want at little cost to them and usually a pretty high cost to the population of the less developed country (Tansey and Hyman,
1994). Examples of the misuse of power are the transnational corporations operating in underdeveloped countries that take advantage of the supply of labor and less restrictive labor practices. The corporations locate themselves in an underdeveloped country and because they are not a national company the profits ultimately go back to the center and the periphery suffers. The second claim made by dependency theorists is that classical theories do not apply to development in the periphery and depends on the claim of classical theorists that the underdeveloped countries are having trouble developing due to the lack of advancement in technology and capital.
Dependency theorists argue that lack of development is caused by the power held over the less developed countries by the developed countries whereas the classical theorists say that taking a laissez-faire approach and the use of free markets will help spur economic development. Classical theorists also believe that economic development and becoming a middle class society will evenly distribute wealth while dependency theorists argue that becoming more developed actually increases the gap between the rich and poor since the newly created jobs are mainly for skilled workers rather than the abundant unskilled laborers that usually live in less developed countries (Tansey and Hyman, 1994). This may not be the strongest argument for Neocolonial Dependency Theory as the gap between the rich and poor is growing even in developed countries. The third claim made by dependency theory is linked to the first claim of the relationship between the center and the periphery.
The idea that the developed countries make exchanges that benefit themselves with no regard to the less developed countries’ needs stems from the historical colonization of the periphery. In the past, colonized countries were only considered valuable because of the resources they held and the slave labor they could supply.
In today’s world, multinational corporations use factories in less developed countries for their cheap labor and developed countries exploit resources as well as take advantage of exchange rates and the buying power associated with uneven exchange rates. The fourth point asserted by dependency theory is quite true, however like the second point, it is true for developed countries as well (Tansey and Hyman,
1994). The disbursement of wealth is unequal; the rich seem to just get richer and the poor, poorer. Buying big, fancy houses, expensive cars, brand name clothing and purses, and now even personal jets shows off the wealth accumulated by the rich in both developed and underdeveloped countries. While there are relevant points included in the theory’s main ideas as well as some that do not hold there are other positive aspects to examining Neocolonial Dependence Theory.
Theories, like anything else important in this world, are not perfect and do not hold all of the answers to the problem or problems it addressesThe Neocolonial
Dependence Model can examine issues that other models, like the Harrod-Domar
Model or Lewis’ Theory, cannot. The fact that social and political factors are incorporated in coming to conclusions about the issue of development is unique in

92 Celyse Weller the field of economics. Past actions of leaders, while they may not determine the future they certainly influence the structures and institutions within a country.
The way past leaders treated their people and the resources within the country can be very telling as to how a country developed or didn’t develop. While the main focus is how the developed countries maintain a certain modern colonial hold on the periphery, there is also a secondary focus on the struggles and conflicts between social classes within the country. That being said there are certain faults within the Neocolonial Dependence Model one of which is the structural nature of the theory.
The Neocolonial Dependence Model is fairly structural which means that individual actions are largely ignored and collective actions such as actions of the
State are examined. While this may be a better approach when looking at the influence a democratized, developed country has over an underdeveloped country since the people, generally speaking, govern a democracy and therefore looking at the institution’s influence may be more productive. However one also needs to consider the actions of a dictator and dependency theory does not always make room for that sort of analysis. Another critique of dependency theory is that it has
Marxist tendencies, which may be valid as it has distant roots in Marxist teachings.
Also, critics of Neocolonial Dependency Theory claim that it takes into account too much of the Western World and therefore, the ideas and needs of the Third
World are pushed away. Some even say that dependency incorporates a certain
Orientalism that it does not recognize (Kapoor, 2002). This in turn overshadows the already disenfranchised Third World even more. Also, the fact that the theory focuses on more socially oriented issues, while being a positive; it also can hinder economic development work. The lack of economically based research within this framework can be a hindrance when trying to determine why a certain county has
Table 1
Endogenous Growth Model
Source: Jaramillo and Sancak, 2007

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
93 not developed. Despite the fact that dependency theory has been called too structural and not economically minded enough, the following model is a good representative of how external factors and conditions, while some not directly, have an effect on all parts of growth.
As one can see, the external conditions directly affect factor endowments, structural policies, stabilization policies, and institutions. Indirectly, income is affected by the external conditions as well as productivity. Although this model is not a component of Neocolonial Dependency Model it is a way of visually representing that what one country or person does, can have a certain amount of influence on other factors within an outside economy.
The Neocolonial Dependency model relies on shifting attention to the periphery and this is where the False Paradigm comes in. The False Paradigm brings to light, while often times well intentioned, misguided actions of policy makers, scholars, and aid agencies. Once people and institutions become aware of the False Paradigm, their actions can become more attuned toward the actual needs and wants of people of the less developed countries. Until that point however, the False Paradigm seems like a false paradigm in itself.
It appears that the False Paradigm is often pushed on developing countries along with the Neocolonial Dependency Model when they are not stable enough to really be able to utilize the models. “As soon as a country is politically stable and can adopt elements of the Big Push Model… with a great deal of consciousness of the impact of the Neoclassical Dependence Model, False-Paradigm Model, and the
Dualistic-Development Thesis then the engine of takeoff is naturally switched on”
(Oshodi, 2009, 14). Judging by this statement, the False Paradigm and the
Neocolonial Dependence Model, in a sense keep developing countries in a type of modern colonial hold until stability is achieved. By promoting the power and legitimacy of these models, the developed world maintains a certain hold over production and development of poorer countries. The following is a graph representing the direction of growth of Haiti and the Dominican Republic compared to Latin America and the Caribbean as a whole.
Looking at each of these models separately is not as beneficial as examining cases by using both of them. Taken together a lot more questions are answered than if one only looks at the Neocolonial Dependence Model or the False Paradigm. If only the Neocolonial Dependence Model is used to find answers to questions of development, there is the chance that the actual needs and thoughts of the periphery are ignored.
The False Paradigm brings to light the fact that even when people and leaders try to help, their actions may not produce the results desired. Using the example of aid money given by developed countries to underdeveloped countries, one can see the usefulness of knowing about the False Paradigm. All the money in world may be given to a country but unless it ends up in the right hands and used for the right projects, that money will be a waste. If a country has a self-involved dictator whose only interest is in preserving his power and accruing wealth for himself and his family then aid money should probably not be given directly to the country.

94 Celyse Weller
Table 2
Economic Growth in Haiti and Dominican Republic: 1960-2005
Source: Jaramillo and Sancak, 2007
The growing gap between the development of the Dominican Republic and Haiti starts around 1960. The reason or reasons for this will be explained in depth in the next section. When looking at the previous graph however, one can see that growth in the Dominican Republic follows along a similar path with the rest of Latin America and the Caribbean while Haiti’s not only remains much lower but also is on a steadily declining path. A discussion of whether there is any evidence or explanation within the two models for why Haiti’s economic development has been so different from the Dominican Republic’s economic development is needed.
III. EMPIRICAL SECTION
Before delving into the macroeconomic data collected on Haiti and the Dominican
Republic one must have a basic understanding of the history of both countries to fully understand how the Neocolonial Dependence Model and False Paradigm fit or does not fit within the countries. The similarities between Haiti and the
Dominican Republic extend far beyond inhabiting the same island but ends when looking at the rates and success of development. The similarities start with colonization, occupation by the United States, dictators and political instability, similar natural resources and failed, corrupt economic policy. There are many differences within the similarities between the two countries as well. We will first examine the colonial history of the Dominican Republic and Haiti.

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
95
The island of Hispaniola was first sighted and colonized by the Spanish during the late 1400s. It was not until the gold resources were exhausted and the Spanish lost interest that the French were able to take over the western third of Hispaniola around the late 1600s. The import of black slaves from Africa by the French introduced a completely different racial structure to that of the French colony of
Saint-Domingue whereas the Spanish colony of Santo Domingo relied much less on the labor of slaves and therefore had racial continuity. The reliance on slaves and slave labor, while increased the production and output of agricultural resources exported to France, did not allow Saint-Domingue reach an industrialized society at the natural rate. Meanwhile, Santo Domingo was producing at a subsistence level and needing less slave labor had less racial obstacles to overcome (Metz, 2001).
The fight for independence also had some similarities but on closer inspection, has important differences.
The fight for independence by both Saint-Domingue and Santo Domingo was not only a struggle between the colonized and the colonizers but also between the two colonies themselves. In a peace treaty between France and Spain, Spain gave up their control over the eastern two-thirds of Hispaniola, which briefly gave the
French control of both Saint-Domingue and Santo Domingo. This control lasted from 1802 to 1809 when Spanish landowners retook control of Santo Domingo with the help from Haitians as well as the British who blocked the port of Santo Domingo.
By the summer of 1809 the French had completely departed and Spain maintained control through 1821 (Metz, 2001).
In 1822, Jean-Pierre Boyer who gained control of Haiti in 1820 invaded Santo
Domingo in order to ensure that a foreign presence would not continue to be present.
While this siege united both sides of the island and ended the practice of slavery, the relationship between the French and Spanish sides was not a peaceful one
(Metz, 2001). The treatment of people in Santo Domingo by the Haitians was violent, brutal, and led to clashes between Haitians and Dominicans, which eventually led to Dominican efforts to crush Haitian rule.Another decision made by Boyer that had a large influence on Haiti’s future was meant to keep foreign influences off the island as well.
Perhaps one of the most important actions of Boyer’s term was his decision to pay a 150-million-franc indemnity to France in exchange for France’s recognition of a freed Haiti. This decision was meant to keep foreign influences out of Haiti, though opposite happened. The payments being made to France not only were detrimental to Haiti’s economy but also gave France control over Haiti’s finances
(Metz, 2001). This is one of the biggest differences between Haiti and the Dominican
Republic and their fight for independence while,political instability has plagued both Haiti and the Dominican Republic since independence.
Between the years of 1843-1915, Haiti had twenty-two leaders, of which only one lived through and served his entire term while all the rest died, were assassinated, or forced out of office. In comparison, the Dominican Republic also

96 Celyse Weller had a period of high turnover of leaders from 1865 to 1879 with twenty-one leaders and fifty military uprisings. Following these periods of political and military uprisings was the occupation by the United States of both Haiti and the Dominican
Republic (Metz, 2001).
In the Dominican Republic, the threat of losing control over customs revenue, a
United States corporation ironically called the Improvement Company, brought
Dominican issues to the forefront of U.S. concerns. The occupation of the Dominican
Republic lasted from 1916 to 1924, while Haiti was occupied from 1915-1934. The occupation of Haiti was also motivated by financial interests held by the United
States but the catalyst for the invasion stemmed from a public riot and the massacre of President Vilbrun Guillaume Sam. On July 27, 1915, President Guillaume Sam was dragged out into the street and pulled apart by angry Haitians who then paraded parts of him in the street, protesting his order to execute 167 political prisoners
(Metz, 2001). These years of political instability and U.S. occupation were followed by the rise of two immensely different dictators.
In the Dominican Republic, a man named Rafael Trujillo Molina rose to power and maintained some form of control from 1930 to 1961. In Haiti Francois Duvalier, also known as “Papa Doc”, gained power from 1957 to 1971. The differences between these two dictators can account for some of the differences in the structures and institutions within each government and economic policy. Duvalier’s misuse of aid, mainly from the United States, was probably one of his worst actions during his regime for Haiti’s economic wellbeing and future. Duvalier was a violent and selfindulgent person who was more interested in accruing wealth for himself, his family, and followers than in developing policies that would secure a stable political and economic future for Haiti. Trujillo’s treatment of the Dominican people was not any better than Duvalier’s treatment of the Haitian people and he also had a desire to maintain power and accrue wealth (Metz, 2001). However, economically speaking
Trujillo did more than Duvalier to help his country get on a path of economic freedom from mainly U.S. aid and therefore control.
During his first term he ended the control that the United States had over
Dominican customs, paid down the government’s debt, and created a national currency that replaced the dollar. Trujillo’s actions, however, should not be seen as coming from a place of caring or compassion but from a position of greed and selfinterest (Metz, 2001). His motivations for enacting the policies he did was to gain the wealth and power he desired. This very brief history does not even attempt to cover all of the complexities incorporated in the history of both countries but hopefully it is enough to understand that the political instability and lack of economic infrastructure led to foreign occupation and influence. Before looking at how the
Neocolonial Dependence Model and the False Paradigm are incorporated in the study of the economic growth of Haiti and the Dominican Republic taking a look at the current GDP of Haiti and the Dominican Republic should be done.
The current government and per capita GDP as well as the growth rate for
Haiti and the Dominican Republic are a good place to start in order to examine the

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
97 influences the past has had on the present. For whatever reason, the past leaders of the Dominican Republic have had more success with developing their economy than Haiti’s leaders have in part because the Dominican Republic was able to develop trading relationships, maintain and manage its natural resources better, and industrialize much better than Haiti has. In the case of Haiti, its’ past as a slavebased plantation agriculture has had an impact on Haiti’s trading structure and can be seen as one reason Haiti lags so far behind the Dominican Republic (Diamond,
2004).
Table 3
GDP and Growth Data for 2010
Haiti
Current GDP
GDP Growth Rate
Per Capita GDP
Source: State Department, 2011
6.56 Billion (U.S. Dollars)
2.9%
$733 (U.S. Dollars)
Dominican Republic
51.6 Billion (U.S. Dollars)
7.8%
$5,231 (U.S. Dollars)
The information in the table above shows the most recent data available and is a good representation of how the two countries are doing today but it is necessary to look at the past policies, reforms, and structures to understand where Neocolonial
Dependency Model and the False Paradigm are useful in understanding economic development.
Inflation and unemployment rates can be a good indicator of whether a country has achieved economic stability or not. Looking at past inflation and unemployment rates of both Haiti and the Dominican Republic one will notice the great fluctuations from year to year. These fluctuations can be attributed to foreign influences and world markets as well as a lack of stable financial institutions and policies.
Comparing the inflation rates between Haiti and the Dominican Republic, the
Dominican has a history of lower inflation and maintained a fairly steady rate below ten per cent from 2005 and 2010. Around 2004, the Dominican saw a spike in inflation that reached around fifty per cent and then severely dropped down again in 2005. As for Haiti, their inflation rates have maintained numbers above those of the Dominican Republics from 1999 to 2010 however looking at the numbers from the 1960s to 1986 it seems that the years Haiti had high rates of inflation, the
Dominican Republic had low rates of inflation and vice versa. The exception to this is from 1974 to 1976 and again in 1980 and 1982 where they had similar rates to each other (World Bank Data, 2010). The spikes and drops in inflation rates can be attributed to economic policies enacted in certain years.
In the 1980s in the Dominican Republic the BCRD, an organization under the
President’s control, was in charge of the nation’s economic policies. It had an interventionist approach that can be compared to the actions of more developed countries. The BCRD tried to control the inflation rate for the President’s own

98 Celyse Weller
Table 4
History of Inflation
Dominican Republic
Date
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1961
1962
1963
1964
1965
1966
1967
1978
1979
1980
1981
1982
1983
1984
1985
1986
Source: World Bank, 2011
Inflation Rate
-3.900000001
9.2
8.6
2.1
-1.9
0.3
1.2
0.04
1
3.8
3.6
8.6
15.1
13.1
14.5
7.8
12.9
3.5
9.2
16.8
7.5
7.6
5.6
20.2
45.3
7.6
Date
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1961
1962
1963
1964
1965
1966
1967
1978
1979
1980
1981
1982
1983
1984
1985
1986
Table 5
Inflation Graph: Dominican Republic
Haiti
Inflation Rate
22.7
15
16.8
7
6.5
1.3
1.4
1.4
9.6
3.2
3.8
-0.6
4.3
9.2
2.3
8.3
-2.9
-2.7
13.1
17.8
10.9
7.4
10.2
6.4
10.6
3.3
Source: Indexmundi, 2011

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
Table 6
Inflation Graph: Haiti
99
Source: Indexmundi, 2011
Table 7
Unemployment Graph: Dominican Republic
Source: Indexmundi, 2011 interest and used hasty changes in policy to exert its control, which in turn created sharp fluctuations in inflation. The BCRD in essence did exactly opposite of what it was in place to do and is an example of the government’s careless policies. In 1983 the Dominican Republic’s inflation rate was around 6 per cent, by 1985 the inflation rate had shot up to 38 per cent and by 1990 it was around 60 per cent. The increase

100 Celyse Weller in inflation was due to negligent economic policies, so when there was a sudden focus on economic policies the inflation rate dropped dramatically to 4.5 per cent in
1992 (Metz, 2001). Haiti, meanwhile, had its own way of trying to equalize its inflation rates.
Haiti’s way of controlling inflation in the late 1990s relied on practices that would allow Haiti to avoid fixing their exchange rate. Like the Dominican Republic,
Haiti put into practice strict economic policy but also strengthened the tax collection program by reducing tax evasion and especially focusing on larger companies and unifying the sales tax rates. The result of this restructuring was a fall in inflation from approximately 16 per cent in 1997 to just below 12 per cent in 1998 (Metz,
2001). When looking at the unemployment rates, the two countries are very different from what one would expect to see.
The direction of Haiti’s unemployment rates have been steadily dropping since
2000 while the Dominican Republic’s have risen and fallen throughout the last eleven years.
Table 8
Unemployment Graph: Haiti
Source: Indexmundi, 2011
Unemployment in the Dominican Republic declined in the mid 1990s to around sixteen per cent from about twenty per cent in the early 1990s. While this was a major improvement from the past and predicted that unemployment may continue to decline, “the political economy continued to be strongly influenced by patronage, graft, and a lingering lack of political will to confront the traditional institutions that continued to restrain economic performance” (Metz, 2001, 112). Without the

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
101 motivation to change the status quo, it can be very difficult for an outside force to do so.
A majority of Haitians in 1992 were not considered part of the formal economy and relied on subsistence farming to provide a means for their families. There is also a history of Haitians working in the Dominican during the sugar harvest as well as doing other jobs that Dominicans refused to do and these people contribute to the Dominican economy rather than their own Haitian economy. Also both the
Dominican Republic and Haiti did not enforce the child labor laws and many times the pressures on families to encourage their children to help supplement their parent’s income is the motivation for sending their children into the workforce
(Metz, 2001). While the problem of unemployment is one that will need to be addressed and one that the government’s of both countries will need to aggressively address, in order to be relieved of receiving foreign aid the tax systems will need to be restructured to start bringing in a significant revenue.
In the Dominican Republic until 1996, tax evasion among wealthy elite was rampant and many businesses claimed tax-exempt status illegally. When Leonel
Fernandez Reyna was elected in 1996, he took on the challenge of reforming the tax system, reduced tax evasion, and allowed tax-exempt status for businesses that legally qualified for it. Fernandez’s changes in the tax system were considered to be successful; the budgetary income for the Dominican Republic was 31 per cent higher in 1997 than it was in 1996 (Metz, 2001). In Haiti’s case, the role of government is very minimal but the miniscule amount of revenue collected from taxes has forced the government to focus on more aggressively collecting taxes from its citizens.
In the early 2000s, only 13 per cent of Haiti’s revenue was from taxes mainly because of tax evasion but also because there were so few people registered with the tax bureau, Direction Generale des Impots (DGI). DGI now has a unit dedicated to collecting taxes from the 200 largest taxpayers in the Port-au-Prince region.
They have also made efforts to identify taxpayers who have not been registered in the past. Like other policies and laws in Haiti, enacting this system has been inefficient and people still unwilling to pay has often times forced the DGI to physically make people pay their required tax (Metz, 2001). The introduction of this collection system seems to not have had the positive effect in Haiti as the restructuring had in the Dominican Republic.
The fact that many Haitians are reluctant to register with the DGI or in the end, actually pay their taxes is understandable when looking at how their money has been spent. Haiti’s history of taxation is much like the rest of its’ history, one of corruption. “Members of the presidential family each had their own ‘internal revenues’, that is, a particular set of duties or fees, collected by the state, that went directly to them for their private use” (Trouillot, 1990, 213). There were also zombie employees, who were most likely family members or political supporters of the
President who were on the payroll of state ministries but only showed up to collect

102 Celyse Weller a paycheck (Metz, 200). The system of collecting revenue and more importantly the spending of the revenue did nothing for the country as a whole and did not promote economic growth. During the regime of Jean-Claude “Baby Doc” Duvalier, who was in power from 1971 to 1986, spent only $3.44 per person on health and $3.70 per person on education. Adding to these figures is the fact that Haiti had and still has one of the lowest per capita GDP’s in the world, $300 in 1981 and $733 in 2010 meansthe citizens need control of all the money they earnto support their families
(Trouillot, 1990). In contrast, the government of the Dominican Republic maintained a great deal of control over the nation’s economic sector.
The fact that the Dominican Republic’s government tried to maintain control over the economic policies does not mean that the past leaders were focusing on the good of the nation. Trujillo’s practices and policies, while they presented themselves in ways that were beneficial for economic growth, he put them in place in order to gain a massive wealth for himself. During the time of Trujillo’s regime the Dominican
Republic managed to convey a sense of financial and in essence political stability to the world and that allowed a foundation to be created for the economy (Logan,
1968). For both Haiti’s and the Dominican Republic’s past leaders the motivation behind their actions was personal power and wealth, the difference is in how they achieved those things in regard to the economic well being of each country.
The use of foreign aid in Haiti has been one of the most corrupt and economically damaging practices to its economy. While the aid to the Dominican Republic from
USAID was mainly distributed to local nongovernmental organizations (NGOs) and not directly to the government, in Haiti’s case it wasdistributed to the government until the late 1970s. Especially during “Papa Doc” Duvalier’s regime was it apparent that elite hands were dipping into aid money since there were no efforts to cover up the withdrawals made for the personal use of the President or his family (Metz, 2001). The fact that aid money supposed to be used to help spur economic growth and development was instead being used to line the pockets of elite members of Haitian society is a great injustice to the Haitian people. However, although money given to the NGOs of the Dominican Republic was in fact a very productive way of getting money and aid to some of the right people USAID felt it needed to refine its relationship with the government.
In fact, the plan outlined by USAID for the years 1997 to 2000 was to focus on strengthening the ties between USAID and the Dominican government. The way that USAID previously distributed aid to the Dominican Republic was one that was so successful that other aid agencies looked to the same NGOs to give money to. This being so, USAID decided that if it could strengthen its relationship with the government it might be a channel for other donors and result in better coordination between the government and aid agencies (Metz, 2001). The decision to give aid directly to the government could be a move towards legitimizing the government and its ability to manage aid in a responsible and sustainable way.
Looking at Haiti and the foreign assistance it receives, the move towards giving aid to NGOs rather than the government in the 1980s was a way of showing the

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
103
Haitian government that it could not continue with its scams and gave USAID a way of controlling what policies and institutions would benefit from the money.
“The state’s abdication of its role as service provider created a situation in which foreign-assistance agencies and the NGOs they support served as a kind of shadow government” (Metz, 2001). Because the money was given by a foreign entity to
NGOs, the NGOs were indebted to the foreign countries rather than their own government. This gave the foreign interests a large amount of power over citizens in Haiti and the Dominican Republic. Another reason for aid to be distributed to
NGOs directly rather than the government comes down again to the instability within the political systems of both Haiti and the Dominican Republic.
Neocolonial dependence theorists would argue that the aid given to underdeveloped countries allows the developed countries to have a greater influence over the less developed and their resources. They would claim it is a new form of colonialism, where there is no physical occupation but a financial one. Dependence theorists assert that if LDCs were not so dependent on foreign aid, they could then take control of their own natural resources and influence their own policies. This self-empowerment would in turn help set LDCs on a path of economic development.
While this claim has some truth to it, there are other factors that play into development that also need to be addressed.
One of those factors is the idea of the False Paradigm. NGOs that receive aid from developed countries who may not be based in the particular underdeveloped countries, need to take into account what the country or region needs not what the people from the NGOs believe is needed. Even the NGOs based in an underdeveloped country would do well to hire local people who know what the living and working conditions are like because they are more likely to know sustainable solutions to problems in their country than someone who grew up in a privileged area and studied at a private university. The Neocolonial Dependence Model and the False
Paradigm are helpful in understanding certain aspects of development but they are not useful for fully explaining why development occurs or doesn’t occur in certain situations.
IV. CONCLUSION
When looking at the past and present conditions of Haiti and the Dominican
Republic, one can see that the internal disputes within each country has had more influence on economic development. Metz sums up the outlook for Haiti nicely by stating, “The critical situation in which Haiti finds itself stems mainly from its chronic political instability, which occasionally borders on chaos” (2001, 406). The routes that Trujillo and “Papa Doc” Duvalier took to increase their fortunes are probably at the heart of why there is so much disparity between Haiti and the
Dominican Republic’s development. Trujillo established a foundation that allowed for growth while Duvalier ignored his country’s needs completely. Without a solid foundation there can be no hope of sustainable and solid growth and Trujillo, regardless of his brutality, set that foundation. If there is a good base, there can be

104 Celyse Weller adjustments made for instability but if there is no foundation, instability will collapse any and all progress made.
This is why the Neocolonial Dependence Model and the False Paradigm have trouble explaining why Haiti has had so much less growth than the Dominican
Republic. They focus mainly on the pressures put on LDCs from foreign forces when the problem in Haiti is with the lack of production and stability from the people. There is no evidence that dependence is causally related with the underdevelopment of LDCs, and therefore should be used in conjunction with other more economically oriented theories or models (Lall, 1975). With this said there are uses for Neocolonial Dependence Theory and the False Paradigm since in a globalized world the actions of one country will affect all other countries, they are just not the right tool for analyzing the differences between Haiti and the Dominican
Republic.
References
Atkins, G. P. and L. C. Wilson (1998), The Dominican Republic and the United States: From
Imperialism to Transnationalism ,University of Georgia Press, Athens.
Calder, B. J. (1984), The Impact of Intervention: The Dominican Republic During the U.S.
Occupation of 1916-1924 , University of Texas Press, Austin.
Diamond, J. M. (2005), Collapse: How Societies Choose to Fail or Succeed , Viking, New York.
“Dominican Republic” (2011), U. S. Department of State. http://www.state.gov/r/pa/ei/bgn/
35639.htm
(accessed November 7, 2011).
“Dominican Republic - Inflation rate (consumer prices) - Historical Data Graphs per Year” (2011),
Index Mundi - Country Facts. http: // www.indexmundi.com/g/g.aspx?v=71&c=dr&l=en
(accessed November 6, 2011).
“Dominican Republic - Unemployment rate - Historical Data Graphs per Year” (2011), Index
Mundi - Country Facts. http: // www.indexmundi.com/g/g.aspx?v=74&c=dr&l=en (accessed
November 7, 2011).
“Haiti” (2011), U. S. Department of State. http: // www.state.gov/r/pa/ei/bgn/1982.htm (accessed
November 7, 2011).
“Haiti – Inflation rate (consumer prices) – Historical Data Graphs per Year” (2011), Index Mundi
- Country Facts. http: // www.indexmundi.com/g/g.aspx?v=71&c=ha&l=en (accessed
November 7, 2011).
“Haiti – Unemployment rate – Historical Data Graphs per Year” (2011), Index Mundi - Country
Facts. http: // www.indexmundi.com/g/g.aspx?v=74&c=ha&l=en (accessed November 7, 2011).
Jaramillo, L. and C. Sancak (2007), “Growth in the Dominican Republic and Haiti: Why has the
Grass Been Greener on One Side of Hispaniola?.” IMF Working Paper 07, No. 63, 4-31.
Kapoor, I. (2002), “Capitalism, Culture, Agency: Dependency versus Postcolonial Theory.” Third
World QuarterlyVol. 23, No. 4, 647-664. http: // www.jstor.org/stable/3993481 (accessed
October 25, 2011).
Lall, S. (1975), “Is ‘Dependence’ a Useful Concept in Analysing Underdevelopment?.” World
Development , Vol. 3, No. 11 & 12, 799-810. http://www.sciencedirect.com/science/article/ pii/0305750X75900819 (accessed October 25, 2011).
Logan, R. W. (1968), Haiti and the Dominican Republic , Oxford University Press, New York.

Neocolonial Dependence Model and the False Paradigm: Useful for Explaining...
105
Metz, H. C. (2001), Domincan Republic and Haiti: Country Studies , Library of Congress,
Washington D.C.
Oshodi, B. A. (2009), “Developing Integral Governance and Economic Framework for Sub­Saharan
Africa .” Social Science Research Network, 1-18. http: // ssrn.com/abstract=1416851 (accessed
October 25, 2011).
Tansey, R. and M. R. Hyman (1994), “Dependency Theory and the Effects of Advertising by
Foreign-Based Multinational Corporations in Latin America.” Journal of Advertising , Vol.
23, No. 1, 27-42. http: // www.jstor.org/stable/4188913 (accessed November 3, 2011).
Todaro, M. P. and S. C. Smith (2003), Economic Development , 8th ed., Addison Wesley, Boston.
Trouillot, M. (1990), Haiti , State Against Nation: The Origins and Legacy of Duvalierism . Monthly
Review Press, New York.
“UNdata | record view | GDP growth (annual %)” (2011), UNdata. http://data.un.org/
D a t a . a s p x ? q = H a i t i & d = W D I & f = I n d i c a t o r _ C o d e % 3 a N Y . G D P . M K T P . K
D.ZG%3bCountry_Code%3aHTI (accessed November 7, 2011).
“UNdata | record view | Per capita GDP at current prices - US dollars” (2011), UNdata. http:// data.un.org/Data.aspx?q=Haiti&d=SNAAMA&f=grID%3a101%3bcurrID%3aUSD
%3bpcFlag%3a1%3bcrID%3a332 (accessed November 7, 2011).