Inequality in Cuba after
the Soviet Collapse
The case of Cuba is practicallyunique: a countrywhose government remained not only nominally but in fact communist all the way through the first decade of the twenty-first century, and with possibly (until his retirement in 2008) the longest-serving head of government in the world. It is also a country whose internal workings remain obscure to most American economists, thanks to the long-standing embargo, the difficulty of travel even for academic purposes, and the resulting low level of contact.1 Nevertheless, like other countries Cuba maintains economic statistics, and as elsewhere they can be mined for information.
Cuba followed a path unlike practically all other socialist countries after the fall of the Soviet Union. Two differences are especially noteworthy. First, there was no economic transition from a socialist model to one based on market principles. Although the political and social project that the Cuban revolution embraced was severely affected by the demise of the USSR, Cuba’s government did not abandon the declared goal of an egalitarian society under state socialism. Second, there was no political collapse; the authority of the Castro brothers and of the Communist Party remained intact. These facts were entirely remarkable given the severity of the economic crisis, which may have been deeper than anywhere else in the post-Soviet world except possibly within the former Soviet Union itself. Unlike the countries of Eastern Europe, Cuba had nowhere to turn in 1991; it would not begin to replace the lost Soviet aid—especially subsidized oil—until after Hugo Chavez came to power in Venezuela in 1999.
This chapter analyzes the evolution of pay inequality in Cuba from the early 1990s through 2004, covering what was called the “Special Period in Times of Peace”—the difficult years following the collapse of the USSR.2 The data are