IDEAS home Printed from https://ideas.repec.org/p/wdi/papers/2007-890.html
   My bibliography  Save this paper

Social Costs of Mass Privatization

Author

Listed:
  • David Stuckler
  • Lawrence P. King

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.

Suggested Citation

  • 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.
  • Handle: RePEc:wdi:papers:2007-890
    as

    Download full text from publisher

    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/64393/1/wp890.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Falcetti, Elisabetta & Raiser, Martin & Sanfey, Peter, 2002. "Defying the Odds: Initial Conditions, Reforms, and Growth in the First Decade of Transition," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 229-250, June.
    2. Suhrcke, Marc, 2000. "Are reforms from a centrally planned to a market system bad for health?," HWWA Discussion Papers 105, Hamburg Institute of International Economics (HWWA).
    3. Elizabeth Brainerd & David M. Cutler, 2005. "Autopsy on an Empire: Understanding Mortality in Russia and the Former Soviet Union," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 107-130, Winter.
    4. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    5. Vladimir Popov, 2000. "Shock Therapy Versus Gradualism: The End Of The Debate (Explaining The Magnitude Of Transformational Recession)," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 42(1), pages 1-57, April.
    6. Randall K. Filer & Jan Hanousek, 2002. "Data Watch: Research Data from Transition Economies," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 225-240, Winter.
    7. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    8. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    9. Sen, Amartya, 1998. "Mortality as an Indicator of Economic Success and Failure," Economic Journal, Royal Economic Society, vol. 108(446), pages 1-25, January.
    10. 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, vol. 40(3), pages 793-836, September.
    11. Sartori, Anne E., 2003. "An Estimator for Some Binary-Outcome Selection Models Without Exclusion Restrictions," Political Analysis, Cambridge University Press, vol. 11(2), pages 111-138, April.
    12. Brainerd, Elizabeth, 1998. "Market reform and mortality in transition economies," World Development, Elsevier, vol. 26(11), pages 2013-2027, November.
    13. James Heckman & Salvador Navarro-Lozano, 2004. "Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 30-57, February.
    14. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
    15. Bruno Merlevede & Koen Schoors, 2004. "Reform, FDI and Economic Growth: Tale of the Tortoise and the Hare," William Davidson Institute Working Papers Series wp730, William Davidson Institute at the University of Michigan.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Le, Hoang Cuong & Cabalu, Helen & Salim, Ruhul, 2014. "Winners and losers in Vietnam equitisation programs," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 172-184.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Hamm & David Stuckler & Lawrence King, 2006. "Mass Privatization and the Postcommunist Mortality Crisis," Working Papers wp118, Political Economy Research Institute, University of Massachusetts at Amherst.
    2. Natkhov, Timur & Pyle, William, 2023. "Revealed in transition: The political effect of planning's legacy," European Economic Review, Elsevier, vol. 159(C).
    3. Farida Akhtar, 2017. "Conditional returns to shareholders of bidding firms: an Australian study," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57, pages 3-43, April.
    4. David Stuckler & Lawrence King & Greg Patton, 2009. "The Social Construction of Successful Market Reforms," Working Papers wp199, Political Economy Research Institute, University of Massachusetts at Amherst.
    5. Pavel Grigoriev & Vladimir Shkolnikov & Evgueni Andreev & Domantas Jasilionis & Dmitri Jdanov & France Meslé & Jacques Vallin, 2010. "Mortality in Belarus, Lithuania, and Russia: Divergence in Recent Trends and Possible Explanations [La mortalité en Biélorussie, Lituanie et Russie: Divergence dans les Tendances Récentes et Explic," European Journal of Population, Springer;European Association for Population Studies, vol. 26(3), pages 245-274, August.
    6. S. I. Dolgikh & B. S. Potanin, 2023. "The Impact of Public Administration on the Efficiency of Russian Firms," Studies on Russian Economic Development, Springer, vol. 34(1), pages 59-67, February.
    7. repec:zbw:bofitp:2022_012 is not listed on IDEAS
    8. Torbjörn Becker & Anders Olofsgård, 2018. "From abnormal to normal : Two tales of growth from 25 years of transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(4), pages 769-800, October.
    9. Daniel Treisman, 2010. "Death and prices," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(2), pages 281-331, April.
    10. Ribar, David C., 2004. "What Do Social Scientists Know About the Benefits of Marriage? A Review of Quantitative Methodologies," IZA Discussion Papers 998, Institute of Labor Economics (IZA).
    11. Thomas Barnay & Sandrine Juin, 2014. "Does care to dependent elderly people living at home increase their mental health?," TEPP Working Paper 2014-06, TEPP.
    12. Bruno Merlevede, 2003. "Reform reversals and output growth in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 649-669, December.
    13. Michael Lokshin & Martin Ravallion, 2008. "Testing for an economic gradient in health status using subjective data," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1237-1259, November.
    14. Fidrmuc, Jan & Tichit, Ariane, 2009. "Mind the break! Accounting for changing patterns of growth during transition," Economic Systems, Elsevier, vol. 33(2), pages 138-154, June.
    15. Thomas Andren & Daniela Andren, 2006. "Assessing the employment effects of vocational training using a one-factor model," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2469-2486.
    16. Berning, Joshua, 2015. "The role of physicians in promoting weight loss," Economics & Human Biology, Elsevier, vol. 17(C), pages 104-115.
    17. Josip Tica & Viktor Viljevac & Matija Matiæ, 2023. "Employment rate and economic growth:The case of transition countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 41(1), pages 9-39.
    18. Jeffrey Kouton & Rafiou R. Bétila & Moïse Lawin, 2021. "The Impact of ICT Development on Health Outcomes in Africa: Does Economic Freedom Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1830-1869, December.
    19. Lawrence King & Patrick Hamm, 2005. "Privatization and State Capacity in Postcommunist Society," William Davidson Institute Working Papers Series wp806, William Davidson Institute at the University of Michigan.
    20. David J. McKenzie & Nicole Hildebrandt, 2005. "The Effects of Migration on Child Health in Mexico," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2005), pages 257-289, August.
    21. Natkhov, Timur & Pyle, William, 2022. "Revealed in transition : The political effect of planning’s legacy," BOFIT Discussion Papers 12/2022, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    privatization; postcommunist; mortality crisis;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2007-890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: WDI (email available below). General contact details of provider: https://edirc.repec.org/data/wdumius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.