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Are reforms from a centrally planned to a market system bad for health?

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  • Suhrcke, Marc
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    Abstract

    Alerted by the dramatic mortality increase in Russia after the onset of transition, and inspired by Sen (1997) to interpret mortality as an indicator of economic performance, mortality data is used as the benchmark, by which to judge the success or failure of transition in Central and Eastern Europe. In particular, it is examined whether reforms from a centrally planned to a market system did have a detrimental effect on health during transition, as it has allegedly been the case in Russia. Controlling for other determinants of health such as GDP growth and health provision, the hypothesis that reforms are bad for health cannot be supported. Instead, good reforms do have a beneficial effect, quite independently of GDP growth. In the 23 countries examined for the period 1989-96, health provision can only account for the development of infant, child and female mortality rates, but not for adult male mortality, which seems to be largely due to stress-related phenomena, that are generally considered to be quite unrelated to health care provision. Further, in contrast to the growth in transition-literature, there seems to be no trade-off between short-term costs and longterm benefits of reform. Good reform directly translates into better health. Several mechanisms are discussed to shed light on the link between good reform and good health. A particularly worrying trend with potentially wide-ranging long-term implications for the CEECs? development paths derives from the observation of a substantial degree of divergence in health status across the region, given the important role of health in determining future growth prospects. -- Alarmiert durch den dramatischen Anstieg der Sterblichkeitsrate in Russland in den ersten Jahren der Transformation und basierend auf Sen?s (1997) Idee, Sterblichkeit als Indikator ökonomischer Performance zu interpretieren, verwenden wir Sterblichkeitsraten als Maßstab zur Evaluierung von Erfolg oder Mißerfolg der Transformation in Mittel- und Osteuropa. Insbesondere wird untersucht, ob die strukturellen Reformen von der Plan- zur Marktwirtschaft eine negative Auswirkung auf den Gesundheitsstatus hatten, wie das Negativ-Beispiel Russland suggeriert. Wenn für andere Determinanten der Gesundheitsentwicklung kontrolliert wird- wie z.B. die Wachstumsraten des Bruttosozialproduktes und die Bereitstellung von Gesundheitsdiensten, zeigt sich, dass diese Hypothese nicht aufrechterhalten werden kann. Im Gegenteil, eine ?gute? Reformpolitik verrringert die Sterblichkeitsraten relativ unabhängig vom BSP-Wachstum. In den 23 untersuchten Ländern für den Zeitraum 1989-1996 kann die Bereitstellung an Gesundheitsdiensten nur die Entwicklung der Kinder- und Frauensterblichkeit erklären, nicht jedoch die der erwachsenen Männer. Letztere scheint in der Tat eher von stress-induzierten Phänomenen verursacht worden zu sein, die grundsätzlich als vergleichsweise unabhängig von Gesundheitsdiensten gilt. Darüber hinaus zeigt sich im Gegensatz zur Literatur über Wachstum in der Transformation, daß es keinen trade-off zwischen kurzfristigen Kosten und langfristigem Nutzen der Reform zu geben scheint: Gute Reformen führen unmittelbar zu einem verbesserten Gesundheitsstatus. Einige Mechanismen werden diskutiert, die für diesen Zusammenhang verantwortlich sein könnten. Aufgrund der erheblichen Bedeutung der Gesundheit als Bestandteil des Humankapitals ergibt sich ein besonders besorgniserregender Trend mit potentiell weitreichenden Konsequenzen für die Entwicklungsperspektiven der MOEs aus der Beobachtung zunehmender Divergenz der Sterblichleitsraten innerhalb der Region.

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    Bibliographic Info

    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 105.

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    Date of creation: 2000
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    Handle: RePEc:zbw:hwwadp:26142

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    1. Filmer, Deon & Hammer, Jeffrey & Pritchett, Lant, 1998. "Health policy in poor countries : weak links in the chain," Policy Research Working Paper Series 1874, The World Bank.
    2. Amartya Sen, 1995. "Mortality as an Indicator of Economic Success and Failure," Innocenti Lectures innlec95/2, UNICEF Innocenti Research Centre.
    3. Desai, Meghnad, 1994. "The Measurement Problem in Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 34-42, February.
    4. Dewatripont, M & Roland, G, 1992. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," Economic Journal, Royal Economic Society, vol. 102(411), pages 291-300, March.
    5. John Strauss & Duncan Thomas, 1998. "Health, Nutrition, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 766-817, June.
    6. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1.
    7. Paul Brenton & Daniel Gros & Guy Vanadille, 1997. "Output decline and recovery in the transiton economies: causes and social consequences," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 113-130, 05.
    8. Xavier X. Sala-i-Martin, 1997. "I Just Ran Four Million Regressions," NBER Working Papers 6252, National Bureau of Economic Research, Inc.
    9. Mwabu, G., 1996. "Health Effects of Market-Based Reforms in Developing Countries," Research Paper 120, World Institute for Development Economics Research.
    10. John Robst & Glenn Graham, 1997. "Access to health care and current health status: do physicians matter?," Applied Economics Letters, Taylor & Francis Journals, vol. 4(1), pages 45-48.
    11. International Monetary Fund, 1998. "Recovery and Growth in Transition Economies 1990-1997," IMF Working Papers 98/141, International Monetary Fund.
    12. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
    13. Parkin, David, 1989. "Comparing Health Service Efficiency Across Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 5(1), pages 75-88, Spring.
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    Cited by:
    1. David Stuckler & Lawrence P. King, 2007. "Social Costs of Mass Privatization," William Davidson Institute Working Papers Series wp890, William Davidson Institute at the University of Michigan.

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