THE EARLY TRANSITION
In this chapter we address the conditions likely to shape the early period of the transition, defined as the time span during which the socialist, command economy is being transformed into a more politically open and market-oriented economy. We also speculate on the potential consequences of various transition scenarios on corruption and discuss several economic policy levers and potential interventions that, depending on the nature of the transition, could serve to dampen corruption in Cuba over the short term. The next chapter presents long-term policy initiatives, including those associated with institution building, essential for Cuba to avert corruption during its transition. These initiatives are drawn from the experience of countries that have managed to minimize corruption and from practices being implemented (with varying degrees of success) in transition and developing countries around the world.
The short-term outlook for a Cuban transition with modest levels of corruption is less than promising. Based on history and close to a halfcentury of socialism, there are few reasons to anticipate that Cuba will face conditions conducive to good governance and prevent state capture and other forms of grand corruption. However, during the early transition, measures to activate the market should help reduce many forms of petty administrative corruption. The same will be the case with much of the corruption associated with Cuba’s centrally planned economy as the economy is privatized and bureaucratic discretion is reduced.
Of particular concern is the spontaneous privatization of state-owned assets by the Cuban equivalents of the infamous Russian “oligarchs,” exSoviet officials who, based on their political power, managed to illicitly acquire national assets by manipulating privatization procedures. Equally likely is the prospect that current elites (e.g., the military) may seek to preserve privileges by retaining control of selected state-owned enterprises, as has occurred in many transition countries and, as we have shown