Comment on "The Forsaken Road: Reassessing Living Standards Following the Cuban Revolution and the American Embargo"

TL;DR

This paper critiques prior research on Cuba's economic decline, demonstrating that the US embargo likely played a significant role once methodological issues are addressed.

Contribution

It identifies and corrects key methodological flaws in previous studies, showing the embargo's substantial impact on Cuba's economic performance.

Findings

The original elasticity estimates were unrepresentative.

The interaction effects were misattributed to other determinants.

Corrected analysis shows embargo's significant role in economic decline.

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.