Comment on "The Forsaken Road: Reassessing Living Standards Following the Cuban Revolution and the American Embargo"
TLDR
This paper refutes claims that the US embargo had minimal impact on Cuba's economy, showing it explains a substantial portion of underperformance.
Key contributions
- Critiques a prior study's assessment of the US embargo's impact on Cuba's economy.
- Highlights the use of an unrepresentative trade openness elasticity in the original analysis.
- Corrects the attribution of interaction effects between the embargo and other growth factors.
- Shows the embargo substantially explains Cuba's post-1959 economic underperformance.
Why it matters
This paper re-evaluates the US embargo's economic impact on Cuba, correcting methodological flaws in a recent study. It shows the embargo substantially explains Cuba's post-1959 economic underperformance. This is crucial for historical economic analysis and informing policy.
Original Abstract
Bastos, Geloso, and Bologna Pavlik (2026) argue that the US embargo explains less than one tenth of the difference in per capita income between Cuba and a counterfactual scenario in which the country did not follow socialist economic policies. We show that their results are driven by the use of an elasticity of income to trade openness that is neither representative nor a reasonable upper bound of the values found in the literature and by their choice to attribute the effect of the interaction between the embargo and other determinants of growth solely to those other determinants. We show that, once these problems are corrected, the embargo can account for a substantial fraction, and in some cases all, of Cuba's post 1959 economic underperformance.
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