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

  • Suhrcke, Marc
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    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.

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    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. 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.
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    4. Amartya Sen, 1995. "Mortality as an Indicator of Economic Success and Failure," Papers innlec95/2, Innocenti Lectures.
    5. 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.
    6. Parkin, David, 1989. "Comparing Health Service Efficiency Across Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 5(1), pages 75-88, Spring.
    7. Xavier Sala-i-Martin, 1997. "I just ran four million regressions," Economics Working Papers 201, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Mathias Dewatripont & Gérard Roland, 1992. "The virtues of gradualism and legitimacy in the transition to a market economy," ULB Institutional Repository 2013/9587, ULB -- Universite Libre de Bruxelles.
    9. International Monetary Fund, 1998. "Recovery and Growth in Transition Economies 1990–97: A Stylized Regression Analysis," IMF Working Papers 98/141, International Monetary Fund.
    10. Desai, Meghnad, 1994. "The Measurement Problem in Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 34-42, February.
    11. Mwabu, G., 1996. "Health Effects of Market-Based Reforms in Developing Countries," Research Paper 120, World Institute for Development Economics Research.
    12. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, December.
    13. 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.
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