Mass Privatisation and the Post-Communist Mortality Crisis: Is There Really a Relationship?

"Mass Privatisation and the Post-Communist Mortality Crisis"
Is There Really a Relationship?

Was mass privatization a "crucial determinant" of the increased mortality in postcommunist societies during the 1990s? This claim appears in a recent article in the British medical journal Lancet. Using country-level data for 15 economies of the former Soviet Union, the article claims to find a positive correlation between the extent of enterprise privatization and the adult male mortality rate. This Web site provides information on research about the privatization–mortality relationship—if it exists.

New research by John S. Earle and Scott G. Gehlbach re-examines the evidence. Re-analysis of the Lancet data shows that the estimated correlation of privatization and mortality is not robust to recomputing the mass-privatization measure, to assuming a short lag for economic policies to affect mortality, and to controlling for country-specific mortality trends. Further, in an analysis of the determinants of mortality in Russian regions, the research finds no evidence that privatization increased mortality during the early 1990s. Finally, reanalysis of the relationship between privatization and unemployment in postcommunist countries shows that there is little support for the Lancet article’s proposed mechanism by which privatization might have increased mortality.

This study is available as: "Mass Privatisation and the Post-Communist Mortality Crisis": Is There Really a Relationship?:

Press Release
Full paper
Summary, published as John S. Earle and Scott Gehlbach. 2010. "Did Mass Privatisation Really Increase Post-Communist Mortality?" Lancet, 375(9712):372.
Web appendix published by Lancet
Press reports on the study:
- World Bank Private Sector Development Blog
- PhysOrg
- ICTDev.org
- Humanitarian News
- Global Development Commons
- The Monkey Cage
- Softpedia
- The Moscow Times
- Vedomosti (in Russian)
- Anti-Dismal Blog, February 11, 2010

A second study by Christopher Gerry, Tomasz M Mickiewicz, and Zlatko Nikoloski examines other aspects of the privatization-mortality relationship and concludes "the claim that mass privatisation adversely affected male mortality trends in the post-Communist world does not stand up to closer examination."

Previous research on the relationship of privatization and employment has used microdata on firms—the level of analysis at which decisions on both privatization and employment are made. In addition to this research on firm-level employment, other papers relevant to the unemployment "pathway" have studied layoffs and other types of worker turnover.

The original Lancet article produced a storm of controversy among defenders and attackers of "shock therapy" policies. For some of this material: