Growth Miracle or Endangered Development? Vested Interests, Policy-Making, and Economic Development in the Dominican Republic

The Dominican Republic is often considered among the most successful developing countries, based primarily on its high and relatively sustained growth rates over the last two decades. On the other hand, indicators of human and social development, healthcare, and education have been particularly poor. I argue that the polarization of economic power plays an important role for this development. Furthermore, I analyze the structure of the Dominican economy in order to show that the country has relied on tourism, services, and special economic zones to obtain relatively high growth rates. These activities do not require high-skilled labor and will not allow the economy to generate high incomes for the population, but benefit a few families who control most conglomerates. In turn, this explains low investment in education and social spending, as well as low taxation rates.