An Investigation of the Link between Remittances to Cuba and Economic Liberalization

Abstract

This thesis focuses on foreign policy between Cuba and the United States, particularly since Cuba allowed remittances to flow into the country in 1993. The research question that this thesis addresses is whether there is a link between remittances and the pattern of increased economic liberalization in Cuba. The methods employed in this thesis are primarily qualitative and include survey data, interviews, and a lower bound paired case study with the Dominican Republic. I find that the flow of remittances to Cuba is channeled more than one would have expected towards small business formation. Bouts of grassroots economic reform seem to be tied to remittances, however formal policy increasing economic liberalization in Cuba tends to arise out of economic desperation. My policy recommendations are focused on facilitating future economic reform on a more continual basis, rather than in sporadic bursts. In this vein, I advise the United States to be more disciplined in the way it approaches foreign policy with Cuba by upholding its sanctions and only offering conditional aid.