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Supporting Cooperative Development in Cuba: Getting the Local Institutions Right

Cuba is currently undergoing an historic transition away from its long standing but inefficient centrally planned economy model, towards a more decentralized, flexible, participative ‘bottom-up’ model of development. Initiating this potentially far-reaching transition began at the historic 6th Party congress in 2011 when the Cuban government announced major changes to the economic system. Among the changes put forward was an important stipulation that the Cuban government wished to put much less emphasis upon state ownership and in its place build a major cooperative enterprise sector (Backer, 2013). Following this decision there has been much subsequent discussion among Cuban economists, notably in an important edited volume by Cuban economist Piñeiro-Harnecker (2013), as well as within the wider academic and international development community (Ranis, 2016: 118-138: Ritter, 2016), as to what practical measures now need to be undertaken in order to best promote the cooperative sector. This chapter is meant as a contribution to this important debate. Much of the debate so far, especially that underway in the US academic and ‘think-tank’ community and in US government institutions, argues (rather predictably) that the transition will be best facilitated if the Cuban government adopts a firmly neoliberal-oriented transition policy package. This is to say the Cuban government needs, above all, to rapidly deregulate and de-supervise the economy and shrink all forms of state capacity. This should enable private individuals to much more easily get involved in individual entrepreneurial projects that, so the thinking goes, will then drive forward the process of development and growth. Rather awkwardly, however, neoliberalism has greatly informed government policy right across the world since the early 1980s, and it has experienced very little real success. We look instead to the lessons of global economic history, and in particular to the practical lessons to be learned from the most successful episodes of sustainable and equitable enterprise development in those countries that have undergone a broadly similar transition to the one that Cuba is undergoing today, but under a quite different pro-active policy regime. Of particular relevance here is the ‘local developmental state’ model, a local state-driven way of successfully promoting enterprise development ‘from the bottom-up’ (see Bateman, 2000, 2016). Our argument is that Cuban local governments need to pay heed to the ‘local developmental state’ model and take the lead in promoting cooperative enterprise development by building a constellation of local state-driven promotional, advisory, financial, R&D, public procurement, technology-transferring and regulatory institutions, among others.

Cuban economic development, co-operativism, local institutional development, transition

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