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Social Costs of Mass Privatization

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  • David Stuckler
  • Lawrence P. King

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    Abstract

    According to leading economic theorists, creating capitalism out of communism requires rapid privatization. In this article we empirically test the welfare implications of privatization policies in Post-Soviet countries by using cross-national panel mortality data as an indicator of social costs. We find that rapid privatization – whether measured by a novel measure of mass privatization program implementation or Enterprise Bank for Reconstruction and Development privatization outcome scores – is a critical determinant of life expectancy losses, and that when privatization policies are reversed, life expectancy improves. Using selection models, we show that endogeneity understates the social costs of rapid privatization.

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    Bibliographic Info

    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp890.

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    Length: pages
    Date of creation: 01 Sep 2007
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    Handle: RePEc:wdi:papers:2007-890

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    Keywords: privatization; postcommunist; mortality crisis;

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    5. Elisabetta Falcetti & Martin Raiser & Peter Sanfey, 2000. "Defying the odds: initial conditions, reforms and growth in the first decade of transition," Working Papers, European Bank for Reconstruction and Development, Office of the Chief Economist 55, European Bank for Reconstruction and Development, Office of the Chief Economist.
    6. Ivaschenko, Oleksiy, 2005. "The patterns and determinants of longevity in Russia's regions: Evidence from panel data," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 788-813, December.
    7. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 40(3), pages 793-836, September.
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    13. Brainerd, Elizabeth, 1998. "Market reform and mortality in transition economies," World Development, Elsevier, Elsevier, vol. 26(11), pages 2013-2027, November.
    14. Randall K. Filer & Jan Hanousek, 2001. "Data Watch: Research Data from Transition Economies," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 416, William Davidson Institute at the University of Michigan.
    15. Bruno Merlevede & Koen Schoors, 2004. "Reform, FDI and Economic Growth: Tale of the Tortoise and the Hare," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan wp730, William Davidson Institute at the University of Michigan.
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    Cited by:
    1. Le, Hoang Cuong & Cabalu, Helen & Salim, Ruhul, 2014. "Winners and losers in Vietnam equitisation programs," Journal of Policy Modeling, Elsevier, Elsevier, vol. 36(1), pages 172-184.

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