13. World Health Organization. European Health for All Database 2012 edition. See also V. M. Shkolnikov and A. Nemtsov, “The Anti-Alcohol Campaign and Variations in Russian Mortality,” Ch. 8 in Premature Death in the New In de pen dent States (Washington, DC, 1997). Available at: http://www.nap.edu/openbook.php?record_id=5530&page=239; V. Shkolnikov, G. Cornia, D. Leon, F. Mesle. 1998. “Causes of the Russian Mortality Crisis: Evidence and Interpretations,” World Development v25:1995–2011.
Some economists have contended Russia’s mortality crisis in the 1990s was simply a rebound effect from ending the anti-alcohol campaign. The Russians who lived through Gorbachev’s anti-alcohol campaign were, they argued, effectively “dead-men walking”—as soon as the campaign ended, they would simply drink themselves to death (e.g., Jay Bhattacharya, Christina Gathmann, and Grant Miller, “The Gorbachev Anti-Alcohol Campaign and Russia’s Mortality Crisis,” March 2011. Available at: https://iriss.stan-ford.edu/sites/all/files/iriss/Russia_mortality_crisis.pdf). But when we looked closely at the data, we found that the people who were saved by Gorbachev’s campaign weren’t dying after the campaign ended. If they were, the dip in death rates in persons ages 20 to 24 in 1985 would correspond to an equal rise in deaths in persons 25 to 29 in 1990. But it did not. Instead, the rise in deaths in the early 1990s vastly outweighed the falls between 1985 and 1987 by more than 2 million deaths. In other words, the end of the anti-alcohol campaign was not the major cause of the rise in drinking-related deaths among Russian men.
Shkolnikov and colleagues investigated the possibility of a rebound effect in a detailed set of epidemiological studies in the mid-1990s, arriving at similar conclusions as we did. Shkolnikov et al. 1998 report evidence that the age-distribution of the mortality drops between 1985 and 1987 and increases between 1988 and 1992 were similar. However, they also find that the excess deaths were beyond the deaths avoided during the 1985–1987 improvements. Further, the probabilities of death in 1995 had become much higher than the initial levels of 1984 (see p. 1999). An examination of mortality fluctuations between 1985 and 1987 and those occurring between 1992 and 1994 show that the magnitude of the mortality drop under Gorbachev’s anti-alcohol campaign is far outweighed by the rise in between 1992 and 1994. Among others, see Shkolnikov and Nemtsov, “The Anti-Alcohol Campaign and Variations in Russian Mortality”; and V. M. Shkolnikov, D. A. Leon, S. Adamets, E. Andreev, and A. Deev. 1998. “Educational Level and Adult Mortality in Russia: An Analysis of Routine Data 1979 to 1994,” Soc Sci Med 47:357–69; Cornia and Paniccia, in their book, The Mortality Crisis in Transition Economies, conclude that, “Contrary to widespread opinion, the mortality changes of the 1990s are not a continuation of past trends” (Ch. 1, p. 4), which they subsequently prove (Ch. 1, section 5, pp. 20–21), noting that “In the case of Russia, Ukraine and Bulgaria (for males) the pre-transition trend is unable to capture the recent evolution of life expectancy. In addition, in the case of Russia, the negative divergences from the life expectancy trend observed during the transition outpace by far the positive ones estimated for the years of the anti-alcohol campaign.” Cornia and Paniccia further indicate that “even if causality between the initial falls and the subsequent rises in mortality could be unambiguously established, the former would explain only between 25 and 35 percent of the latter.” For a more detailed discussion see Appendix 1.1 and 5.5 in D. Stuckler, “Social Causes of Post-communist Mortality,” doctoral dissertation, University of Cambridge, 2009.
14. Alcohol became such a contributing factor to illness that people were much more likely to die over weekends in the 1990s, when they were free from work and went on weekend-long benders—leaving the country in a hangover that lasted from Saturday morning to Monday. M. McKee, et al. 2006. “The Composition of Surrogate Alcohols Consumed in Russia,” Alcoholism: Clinical and Experimental Research. Available at: http://onlinelibrary.wiley.com/doi/10.1097/01.alc.0000183012.93303.90/abstract. See D. Leon, et al. 2007. “Hazardous Alcohol Drinking and Premature Mortality in Russia: A Population Based Case-Control Study,” The Lancet 369:2001–9.
15. In the countryside, people were drinking homebrewed liquors, samogon. M. Wines, “An Ailing Russia Lives a Tough Life That’s Getting Shorter,” New York Times, Dec 30, 2000. Available at: http://faculty.usfsp.edu/jsokolov/ageruss1.htm
16. S. Tomkins, et al. 2007. “Prevalence and Socio-economic Distribution of Hazardous Patterns of Alcohol Drinking: Study of Alcohol Consumption in Men Aged 25–54 Years in Izhevsk, Russia,” Addiction v102(4): 544–53.
17. A. Bessudnov, M. McKee, D. Stuckler. 2012. “Inequalities in Male Mortality by Occupational Class, Perceived Status and Education in Russia, 1994–2006,” European Journal of Public Health v22(3): 332–37. Available at: http://eurpub.oxfordjournals.org/content/22/3/332.short; Perlman and Bobak. 2009. “Assessing the Contribution of Unstable Employment to Mortality in Posttransition Russia: Prospective Individual-Level Analyses from the Russian Longitudinal Monitoring Survey,” American Journal of Public Health v99(10): 1818–25.
18. For this reason, not only was unemployment itself but the fear of unemployment led to an increased risk of dying in Russia. See F. Perlman, and M. Bobak, “Assessing the Contribution.” These social benefit programs contributed to a very high health/GDP ratio in Soviet countries.
In general Soviet economies tended to have much higher life expectancies than capitalist economies at similar levels of GDP per capita (such as Chile, Turkey, Botswana, South Africa, etc.). On average, Soviet men had 4.8 years greater health and Soviet women had 7.7 years greater health for their country’s level of income compared with capitalist economy averages.
19. D. Stuckler, L. King, M. McKee. 2000. “Mass Privatization and the Postcommunist Mortality Crisis,” The Lancet v373(9661): 399–407. Available at: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2809%2960005-2/abstract; see also Perlman and Bobak, “Assessing the Contribution.”
20. L. Balcerowicz and A. Gelb. 1995. “Macropolicies in Transition to a Market Economy: A Three-Year Perspective,” Proceedings of the World Bank Annual Conference on Development Economics 1994. The International Bank for Reconstruction and Development. Available at: http://www-wds.worldbank.org/servlet/WDSContentServer/IW3P/IB/1995/03/01/ 000009265_3970716143745/Rendered/PDF/multi0page.pdf
21. “The need to accelerate privatization is the paramount economic policy issue facing Eastern Europe,” wrote Jeffrey Sachs. “If there is no breakthrough in the privatization of large enterprises in the near future, the entire process could be stalled for years to come. Privatization is urgent and politically vulnerable.” J. Sachs, “What Is to Be Done?” The Economist, Jan 13, 1990. Available at: http://www.economist.com/node/13002085; J. Sachs, “Shock Therapy in Poland: Perspectives of Five Years,” 1995. Available at: http://tannerlectures.utah.edu/lectures/documents/sachs95.pdf
22. A third major element of Shock Therapy was stabilization: a combination of austerity and tight monetary policy to keep inflation low. Lawrence Summers summarized the support for these three central policies of Shock Therapy: “The legions of economists who have descended on the formerly Communist economies have provided advice very similar. The three “- ations”—privatization, stabilization, and liberalization—must all be completed as soon as possible.” Cited in R. Stevens. 2004. “The Evolution of Privatisation as an Electoral Policy, c. 1970–90,” Contemporary British History v18(2): 47–75.
23. M. Friedman, “Economic Freedom Behind the Scenes,” Preface to Economic Freedom of the World: 2002 Annual Report, by James Gwartney and Robert Lawson, with Chris Edwards, Walter Park, Veronique de Rugy, and Smitha Wagh (Vancouver, BC, 2002). Summers cited in T. Anderson, The Concise Encyclopedia of Economics. Available at: http://www.econlib.org/library/Enc/EnvironmentalQuality.html
24. Stevens, “The Evolution of Privatisation as an Electoral Policy.” There was no shortage of advice about which approach to take. The Economist magazine’s editors argued in support of Shock Therapy, writing t
hat the growing acceptance of gradualism is “the greatest peril now facing the countries of Eastern Europe.” The editors of Foreign Affairs agreed: “The radiance of Western justice and success is the power that caused the east European nations and the Soviet Union to abandon what they were and attempt to become what we, the democracies, have made of ourselves. It is a moment to seize.” O. J. Blanchard, K. A. Froot, J. D. Sachs, The Transition in Eastern Europe (Chicago, 1994).
25. B. Naughton, Growing out of the Plan: Chinese Economic Reform, 1978–1993 (Cambridge, 1996).
26. Richard A. Melanson, American Foreign Policy Since the Vietnam War: The Search for Consensus from Richard Nixon to George W. Bush (New York, 2005). Graham Allison and Robert Blackwill, “On with the Grand Bargain,” Washington Post, Aug 27, 1991. L. Berry. “How Boris Yeltsin Defeated the 1991 Communist Coup,” The Guardian, Aug 18 2011. Available at: http://www.guardian.co.uk/world/feedarticle/9803554
27. Source for Figure 2.2: Authors, adapted from P. Hamm, L. King, D. Stuckler. 2012. “Mass Privatization, State Capacity, and Economic Growth in Post-Communist Countries,” American Sociological Review v77(2): 295–324. Central and Eastern European countries (CEE) include the Czech Republic, Hungary, Poland, Slovakia, and Slovenia. Former Soviet countries (FSU) for which data are available since 1990 include Armenia, Azerbaijan, Belarus, Estonia, Georgia, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine, and Uzbekistan. Percentage changes are scaled to GDP per capita in 1990 using constant 2000 international dollars as reported in the April 2008 edition of the UNICEF TransMonEE database.
28. World Bank World Development Indicators (Washington, DC, 2013 edition); Penn World Tables. Center for International Comparisons of Production, Income and Prices. University of Pennsylvania. Available at: https://pwt.sas.upenn.edu/
29. Stuckler, “Social Causes of Post-communist Mortality.” See P. Klebnikov, Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia (Boston, 2000). See M. Ellman. 1994. “The Increase in Death and Disease Under ‘Katastroika’,” Cambridge Journal of Economics v18:329–55; C. Bohlen, “Yeltsin Deputy Calls Reforms ‘Economic Genocide’,” New York Times, Feb 9, 1992. Available at: http://www.nytimes.com/1992/02/09/world/yeltsin-deputy-calls-reforms-economic-genocide.html
30. For a discussion see T. Meszmann, “Poland, Trade Unions and Protest, 1988–1993,” International Encyclopedia of Revolution and Protest, 2009. Available at: http://www.blackwellreference.com/public/tocnode?id=g9781405184649_yr2012_chunk_g97814051846491199
Also, see Stuckler, “Social Causes of Post-Communist Mortality.” See Klebnikov, Godfather of the Kremlin. See Ellman, “The Increase in Death and Disease Under ‘Katastroika’.” Polish government. Official promotional website of the Republic of Poland, Foreign Investment. Available at: http://en.poland.gov.pl/Foreign,investment,468.html
As the Polish government’s foreign investment website notes, “The foreign capital coming into the Polish economy has fulfilled a very important role in the process of privatisation and restructuring. The majority of foreign investment to Poland has taken the most desirable form—direct investment (FDI). Such investments have meant new companies starting from scratch or enterprises already existing on the Polish market being taken over.”
31. P. Hamm, L. King, D. Stuckler. 2012. “Mass Privatization, State Capacity, and Economic Growth in Post-Communist Countries,” American Sociological Review v77(2): 295–324.
32. As Noreena Herz, who then worked for the World Bank explained, she was sent to Russia to oversee the implementation of privatization, living in the factories and feeding information back to headquarters. “I spent months in the factories. In one, I slept in an empty ward in the sanatorium. I realized very quickly that the master plan of privatizing Russian industry overnight was going to impose huge costs on hundreds of thousands of people. These factories were producing goods that once they were launched, no one would want in a too competitive market. They would have to slash tens of thousands of jobs. But also, these factories provided schools, hospitals, health care and retirement—cradle to grave. I raised these concerns in Washington, to say there weren’t any safety nets in place. It became clear to me that it was really a political play, that they wanted to take assets out of the state’s hands, so the Communist Party wouldn’t come back.”
33. O. Adeyi, et al. 1997. “Health Status During the Transition in Central and Eastern Europe: Development in Reverse?” Health Policy and Planning v12(2): 132–45.
34. Sachs, “Shock Therapy in Poland.”
35. Hamm, et al., “Mass Privatization, State Capacity, and Economic Growth in Post-Communist Countries.” The consequences would prove most severe for the employees of large-scale heavy industry and manufacturing enterprises. Of all the privatized firms, these large enterprises were the least equipped successfully to suddenly compete under real market conditions. Their greater inefficiency and technological backwardness meant they would suffer the greatest job losses while their employees, whose skills with Soviet technologies would become redundant, would have a hard time finding new jobs. L. King, P. Hamm, D. Stuckler. 2009. “Rapid Large-Scale Privatization and Death Rates in Ex-Communist Countries: An Analysis of Stress-Related and Health System Mechanisms,” International Journal of Health services v39(3): 461–89; we estimated this loss was about fifteen doctors per 10,000 population.
36. A. Åslund, Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge, 2002); see also Anders Åslund, “Is the Belarusian Economic Model Viable?” in A. Lewis, ed., The EU and Belarus: Between Moscow and Brussels (London, 2002), p. 182.
37. Stuckler, King, McKee, “Mass Privatization and the Postcommunist Mortality Crisis.”
38. Source for Figure 2.3: Adapted from Ibid.
39. See also P. Grigoriev, V. Shkolnikov, E. Andreev, et al. 2010. “Mortality in Belarus, Lithuania, and Russia: Divergence in Recent Trends and Possible Explanations,” European Journal of Population v26(3): 245–74. The paper’s conclusion is consistent with ours: “differences in the speed and the extent of the move to a market economy resulted in quite different effects on mortality trends. Russia experienced the sharpest mortality growth in the beginning of the 1990s, caused by painful market reforms that were not accompanied by the creation of strong market institutions or by a commitment of the state to fulfill its social obligations. By contrast, Belarus, which followed the slowest transition path, suffered the lowest increase in mortality.”
40. To put this effect in perspective, we found that military conflict in the region had caused a 20 percent rise in mortality. In other words, the choice to mass privatize had an impact almost as damaging as violent military conflicts in eastern Europe. Stuckler, King, McKee, “Mass Privatization and the Postcommunist Mortality Crisis.” L. King, P. Hamm, D. Stuckler. 2009. “Rapid Large-Scale Privatization and Death Rates in Ex-Communist Countries: An Analysis of Stress-Related and Health System Mechanisms,” International Journal of Health services v39(3): 461–89.
41. L. Pritchett and L. Summers. 1996. “Wealthier Is Healthier,” The Journal of Human Resources v31(4): 841–68. Available at: http://www.jstor.org/discover/10.2307/146149?uid=3739560&uid=2129&uid=2&uid=70&uid=4&uid= 3739256&sid=21101670942437. At a population level, wealthier is also found to be healthier because governments have greater resources to invest in social protections. When statistical models are used to adjust for the benefits of greater social protection that accompanies increasing GDP, the association of GDP with better health drops by three-quarters. For more details see D. Stuckler, S. Basu, M. McKee. 2010. “budget Crises, Health, and Social Welfare Programmes,” British Medical Journal v340:c3311.
42. When people’s income doubled, on average their life expectancy improved by two years. Yet on average it takes two decades for economic growth to double, when the economy is growing at a rate of 4 percent. So it can safely be said that, by reducing life expectancy by two years, mass privatization amounted to setting back huma
n development in Russia for at least 20 years. See Hamm, King, Stuckler, “Mass Privatization, State Capacity, and Economic Growth in Post-Communist Countries.”
43. Economist Elizabeth Brainerd, who had collaborated with other economists from the Harvard Shock Therapy team, replicated our results and drew the same conclusion as we had: “One indicator of the disruption in the working person’s life is the extent of privatization of state-owned enterprises. While undoubtedly a beneficial development for the economy as a whole and a clear indicator of reform progress, privatization may also create additional stress and uncertainty for individual workers. This interpretation of privatization may explain the positive and significant correlation between the increase in private sector share and rising cardiovascular death rates.” E. Brainerd. 1998. “Market Reform and Mortality in Transition Economies,” World Development v26(11): 2013–27. Cited in E. Brainerd. 1998. “Market Reform and Mortality in Transition Economies,” World Development v26(11): 2013–27. Available at: http://people.brandeis.edu/~ebrainer/worlddev198.pdf. Stanley Fischer, another Shock Therapy advocate, was by the late 1990s struggling to grapple with the fact that “countries that undertook the greatest degree of reform in this period (by this measure) appear to have experienced the highest increases in death rates. This is puzzling.” Cited in Brainerd, “Market Reform and Mortality in Transition Economies.” Friedman cited in M. Hirsh, Capital Offense: How Washington’s Wise Men Turned America’s Future over to Wall Street (New Jersey, 2010), p. 134.
44. Source for Figure 2.4: Authors. World Bank World Development Indicators 2012 edition.
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