Microeconomic Intermediation and Sectoral Integration in a Market Transition

Market transition theory has developed ever more nuanced methodologies for the analysis of institutional change in an economy at mesoand microlevels of analysis. Relying on several of these contemporary analytical methods, this paper will discuss obstacles to, and suggest preliminarily some theoretical and empirical approaches to the study of, the extent of causal influence of levels of sectoral integration on market transitions. This will be undertaken with reference to the interaction in Cuba of (1) tightly-structured, exclusive, and corporatized military-run enterprises with (2) more loosely-bound managerial and entrepreneurial networks in foreign investment and trade sectors and (3) relatively tenuous social and economic networks tracing the outlines of the second economy. Specifically, an examination of incentive structures and operative rules affecting integration or synchronization across these economic sectors will suggest that there are major, and persistent, constraints against a significant transition to the market.