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I examine the effects democratization, institution building, and colonization have on the political and economic stability and inequality in the Caribbean; specifically, I argue that each of these variables contributes to the political and economic inequality experienced between the countries of Haiti and the Dominican Republic, the two states that comprise the island of Hispaniola. While Haiti and the Dominican Republic’s colonization narratives differ, each state’s response to democratization, and its efforts to rebuild and maintain institutions, is integral in understanding why political inequality currently exists on the island and differs between both states. Additionally, this paper finds that the legacy of colonization should be considered a major component of economic inequality between the two states. Ultimately, the success of democratization, the strength of institutions, and the ability to create and maintain a strong economic system explains why the Dominican Republic experiences less inequality than Haiti. These findings shed light on greater political and economic inequality trends and challenges found in the Caribbean region.