Mass Privatization and the Postcommunist Mortality Crisis

Abstract

During the transition to capitalism the postcommunist countries have experienced unprecedented mortality crises, although there has been considerable variation within- and between-countries and regions. Much of this variation remains unexplained, although alcohol and psycho-social stress are found to be major causes of declining life expectancy. We move beyond this finding by showing that the implementation of neoliberal inspired rapid large scale privatization (i.e. “Mass Privatization”) programs was a major determinant of the decline in life expectancy.
The massive economic contraction that followed the disintegration of the Soviet system has attracted a great deal of scholarly attention. What has been relatively neglected is the most troubling aspect of the transitions, the explosive rise in “violent mortality,” or epidemic levels of cardiovascular disease and “external” causes of death, such as alcohol poisoning, homicide and suicide (World Bank 2005, Brainerd and Cutler 2005). Countries in the “mortality belt,” spanning from Estonia in the north to Ukraine in the south, experienced life expectancy declines of up to six years within the first half-decade of reform – a peacetime mortality crisis unparalleled in modern history. To put this in perspective, eliminating all common forms of cancer corresponds to a life expectancy increase of approximately three years, a little less than half of the magnitude of Russia’s mortality experience (Swiss Re, 2004). The United Nation’s MONEE project tabulates that the excess mortality during the 1990s, or deaths that would not have occurred if mortality had remained at 1989 levels, totaled over 3,2 million (UNICEF 2001). This crisis is in no respects over; fifteen years after transition 11 out of 25 of the postcommunist countries have failed to recover to pre-transition levels of life-expectancy, and public health professionals fear chronic disease epidemics and resurgent infectious disease crises such as AIDS and drug-resistant TB.
While the generalized economic crisis that has been labeled the “Postcommunist recession” obviously contributed to this increased mortality, it has not followed the typical patterns of development and health, and can at best be considered only a partial explanation. During the initial stages of reform from 1989 to 1994 the correlation between the logarithmic change in gross domestic product per capita and the logarithmic change in life expectancy was substantial (r=-0,60). Over the next six years, however, the unadjusted relationship weakens considerably (r=-0,13). Several countries, including Russia, exhibit the anomalous experience of declining mortality in the midst of economic recovery. Another enigmatic aspect of the excess deaths has been the disproportionate impact on working age men, rather than vulnerable groups such as the very young and elderly that historically have borne the health brunt of rapid economic destabilization. Infant mortality levels in Russia, aside from an immediate and transient spike following the 1992 reforms, have steadily declined against a background of “epidemic” levels of chronic disease.
Epidemiologic analyses clearly show that the increase in mortality is due to a rise in cardiovascular disease and “external causes” like alcohol poisoning, violent deaths, homicide, suicide and accidents. Psychosocial stress levels and alcohol consumption have occupied central roles in these explanations. Yet, even in the most comprehensive analyses a sizable residual remains unaccounted for.
We will advance a sociological theory of postcommunist mortality that complements the public health literature. We find, all things held equal, that those countries that implemented the neoliberal inspired Mass Privatization programs had greater declines of life expectancy than countries that pursued different types of privatization. This explains a substantial part of the variation, although the magnitude of the effect and the variance explained is sensitive to the type of statistical test employed. Our most conservative estimate of the decrease in overall life expectancy as a result of implementing a Mass Privatization program is 0,86 years, with the highest estimate of 5,14 years.
This paper has four sections. In the first, we review the findings from the public health research and discuss different explanations. In the second we discuss the neoliberal analysis, and develop a “neoclassical sociological” theory of postcommunist mortality that supplements the public health account. We then generate our hypotheses. In the third we discuss our methods and data. In the fourth we present our results, and in the conclusion we discuss the implications for public policy and future research.