Social Costs of Mass Privatization

32 Pages Posted: 25 Jan 2008  

Lawrence P. King

Yale University - Department of Sociology

David Stuckler

University of Cambridge - Faculty of Human, Social, and Political Science

Date Written: September 2007

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.

Keywords: privatization, postcommunist, mortality crisis

JEL Classification: I12, J18, L33, P36

Suggested Citation

King, Lawrence P. and Stuckler, David, Social Costs of Mass Privatization (September 2007). William Davidson Institute Working Paper No. 890. Available at SSRN: https://ssrn.com/abstract=1086378 or http://dx.doi.org/10.2139/ssrn.1086378

Lawrence P. King (Contact Author)

Yale University - Department of Sociology ( email )

493 College St
New Haven, CT 06520
United States

David Stuckler

University of Cambridge - Faculty of Human, Social, and Political Science ( email )

Cambridge, CB3 9DD
United Kingdom

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