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Social Costs of Mass Privatization


  • David Stuckler
  • Lawrence P. King



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

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    References listed on IDEAS

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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, vol. 36(1), pages 172-184.

    More about this item


    privatization; postcommunist; mortality crisis;

    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 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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