Mass privatisation and the post-communist mortality crisis: a cross-national analysis

Abstract

During the early-1990s, adult mortality rates rose in most post-communist European countries. Substantial differences across countries and over time remain unexplained. Although previous studies have suggested that the pace of economic transition was a key driver of increased mortality rates, to our knowledge no study has empirically assessed the role of specific components of transition policies. We investigated whether mass privatisation can account for differences in adult mortality rates in such countries. We used multivariate longitudinal regression to analyse age-standardised mortality rates in working-age men (15-59 years) in post-communist countries of eastern Europe and the former Soviet Union from 1989 to 2002. We defined mass privatisation programmes as transferring at least 25% of large state-owned enterprises to the private sector within 2 years with the use of vouchers and give-aways to firm insiders. To isolate the effect of mass privatisation, we used models to control for price and trade liberalisation, income change, initial country conditions, structural predispositions to higher mortality, and other potential confounders. Mass privatisation programmes were associated with an increase in short-term adult male mortality rates of 12.8% (95% CI 7.9-17.7; p<0.0001), with similar results for the alternative privatisation indices from the European Bank for Reconstruction and Development (7.8% [95% CI 2.8-13.0]). One mediating factor could be male unemployment rates, which were increased substantially by mass privatisation (56.3% [28.3-84.3]; p<0.0001). Each 1% increase in the percentage of population who were members of at least one social organisation decreased the association of privatisation with mortality by 0.27%; when more than 45% of a population was a member of at least one social organisation, privatisation was no longer significantly associated with increased mortality rates (3.4% [95% CI -5.4 to 12.3]; p=0.44). Rapid mass privatisation as an economic transition strategy was a crucial determinant of differences in adult mortality trends in post-communist countries; the effect of privatisation was reduced if social capital was high. These findings might be relevant to other countries in which similar policies are being considered.