DOI: 10.5281/zenodo.16051101
title: Extractive Liquidity: Finance and Collapse in Fragile States

description: Title: Extractive Liquidity: Finance and Collapse in Fragile StatesKeywords: Haiti, institutional collapse, governance substitution, financial sector, education spending, elite containment, V-Dem, property rights, institutional co-production

Description:This dataset and accompanying research examine an institutional paradox in Haiti: sustained growth in the formal banking sector amid a prolonged decline in rule of law, judicial independence, and anti-corruption enforcement. Drawing on panel data from major Haitian banks (2003–2019), merged with Varieties of Democracy (V-Dem) institutional quality indicators and UNESCO education spending data, the study reveals that capital accumulation in fragile states can persist through informal resilience mechanisms and elite-controlled financial structures.

The findings challenge conventional assumptions in institutional and agency theory by showing how elites strategically withhold or channel capital to reinforce stability without enabling democratic reform. In particular, the study shows that private education spending—while correlated with reduced corruption and greater civic participation—is also associated with declines in rule of law and polyarchy. This pattern suggests a strategy of elite containment rather than transformation.

The dataset includes longitudinal financial statements for Haiti’s five largest banks, matched to governance indicators and education finance variables. The analytical scripts (in Python) and regression outputs provide a replicable foundation for studying governance dynamics in weak-state environments.

This study contributes to international business theory by proposing a multidimensional framework of governance substitution and institutional co-production. It underscores the need for inclusive, bottom-up financial reform and offers comparative policy insights from other fragile states such as Lebanon, Zimbabwe, Afghanistan, Somalia, and Venezuela.

🧪 How to Run This Notebook in Google Colab

This repository contains the code and supporting data used in the project:



Title: Extractive Liquidity: Finance and Collapse in Fragile StatesKeywords: Haiti, institutional collapse, governance substitution, V-Dem, Polity, WGI, elite capture, financial institutions


This study investigates the paradox of sustained banking sector growth in Haiti amid institutional breakdown, using data from V-Dem, Polity V, World Bank GDP, and WGI indicators. The notebook performs a filtered, country-level regression analysis of institutional drivers of democracy, using cluster-robust OLS models and multicollinearity diagnostics.



✅ Files Included





haiti_democracy_regression_vdem_polity.ipynb — Main notebook (can be uploaded to Google Colab)




VDEM_trimmed.csv — V-Dem dataset




p5v2018.csv — Polity V dataset




GDP.csv — World Bank GDP data




wgidataset.xlsx — World Governance Indicators (WGI) dataset





🧭 Instructions for Running in Google Colab

🔹 Step 1: Open Google Colab





Go to https://colab.research.google.com




Click “File” > “Upload notebook”




Upload the file haiti_democracy_regression_vdem_polity.ipynb





🔹 Step 2: Upload Supporting Files





Click the folder icon (📁) in the left sidebar of Colab to open the file browser




Click the Upload icon (📤) and upload:





VDEM_trimmed.csv




p5v2018.csv




GDP.csv




wgidataset.xlsx





These will be stored in /content/, which matches the file paths already set in the notebook.



🔹 Step 3: Run the Analysis





Click “Runtime” > “Run all”, or press Ctrl+F9




The notebook will:





Install required packages (pandas, statsmodels, openpyxl)




Import and clean datasets




Merge V-Dem, Polity, GDP, and WGI data




Filter for Haiti




Check for multicollinearity using Variance Inflation Factors (VIF)




Run a cluster-robust regression of polity2 ~ v2x_polyarchy + v2x_pubcorr




Output VIF scores and a full regression summary







🧠 Method Summary





Dependent variable: polity2 (Polity V)




Independent variables: v2x_polyarchy, v2x_pubcorr (from V-Dem)




Filters: Haiti only




Estimator: OLS with clustered standard errors by year




Diagnostics: Variance Inflation Factors (VIF)