Illegal, but legitimate: Underground entrepreneurial practices in Cuba (1993-2023)

Legitimate underground economic activities (LUEAs) have been a longstanding phenomenon in Cuba and have evolved in response to socioeconomic contexts and public policies. From 1993 to 2023, Cuba's regulatory framework for self-employment has undergone three significant periods of legalization and reform, followed by periods of stagnation and constraints on the private sector. These cycles directly and indirectly influenced LUEAs, with more open regulations correlating with a decline in LUEAs and restrictive policies driving entrepreneurial activities underground. Despite regulatory attempts to control self-employment, LUEAs persisted, fueled by license constraints and the prohibition of professional activities. Additionally, the gap between legal and socially acceptable practices allowed LUEAs to thrive. Economic crises and ineffective policies further entrenched underground economic activities, making them a permanent feature of the Cuban economy.