http://www.economist.com/opinion/displaystory.cfm?story_id=12972677

Mass murder and the market
A newly published article in the Lancet...argues that the clear culprit
was mass privatisation (distributing vouchers that could be swapped for
shares in state-owned enterprises). A statistical analysis, it says,
shows that this element of the economic-reform package, nicknamed "shock
therapy", clearly correlates with higher mortality rates.


Jan 22nd 2009
From The Economist print edition
Economic reform in Russia was accompanied by millions of early deaths.
But it was not the cause

MATCHES and even salt were in short supply as the Soviet empire's
planned economies collapsed two decades ago. But blame was plentiful
then and now. Millions of people-chiefly men in late middle age-died
earlier than their counterparts in other countries. That drop, of fully
five years in male life expectancy between 1991 and 1994, demands
explanation. A newly published article in the Lancet
(http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(09)60005
-2/fulltext#article_upsell) , a British medical journal that in recent
years has used epidemiological analysis to examine political and social
questions, argues that the clear culprit was mass privatisation
(distributing vouchers that could be swapped for shares in state-owned
enterprises). A statistical analysis, it says, shows that this element
of the economic-reform package, nicknamed "shock therapy", clearly
correlates with higher mortality rates.

That, says the Lancet, was a shocking failure. It argues that advocates
of free-market economics (it cites an article in this newspaper --
http://www.economist.com/opinion/displaystory.cfm?story_id=13002085 --
by the economist Jeffrey Sachs) ignored the human costs of the policies
they were promoting. These included unemployment and human misery,
leading to early death. In effect, mass privatisation was mass murder.
Had Russia adopted more gradual reforms, those lives would have been
saved.

In fact the blame game must start at the beginning. Why was the Soviet
economy in ruins by 1991? Partly because planned economies don't work
(blame Lenin and Stalin for that). Partly because the gerontocratic
leadership of Leonid Brezhnev failed to start reforms in the early
1970s, when gradualism might have had a chance of succeeding. By the
time Mikhail Gorbachev initiated perestroika and glasnost in the late
1980s, the Soviet Union was all but bust. Worse, by running the printing
presses red-hot, his government created a colossal monetary overhang.
Russians may have thought that their savings evaporated when prices were
liberalised at the start of 1992; in truth, their cash was already
worthless.
Surgical alcohol

The second question is the effect of all this on mortality. Soviet
public-health statistics show a clear decline from 1965 to the early
1980s, with rising deaths from circulatory diseases (because of poor
diet, smoking and, especially, drinking). Mr Gorbachev's anti-booze
campaign-although hugely unpopular-raised life expectancy by fully three
years between 1985 and 1987. After 1992 the state monopoly on alcohol
(and health checks on its quality) collapsed. As anybody who lived in
Russia at the time will recall, the effect was spectacular-and
catastrophic. Death rates returned to their long-term trend.

The thorniest question is about economic policy mistakes after 1991. In
retrospect, the West failed to prepare for the Soviet collapse. It took
too long to recognise that Boris Yeltsin's first government deserved
trust, pressing it too hard on debt repayments and being too stingy with
aid. Then it made the opposite mistake, being too trusting and generous
when Russia was becoming more hawkish and looting was endemic. Mass
privatisation broke the planners' grip but failed to create the
hoped-for shareholder democracy.

Yet the Lancet paper seriously misunderstands both the timing and the
effects of economic reform. It states quite wrongly that "Russia fully
implemented shock therapy by 1994". As it happens, in that year life
expectancy started rising. But in any case reforms were by then bogged
down and advisers such as Mr Sachs had quit in despair. Moreover, mass
privatisation had little immediate effect on jobs-or much else. Most
Russians exchanged their vouchers for trivial amounts of cash, or even
vodka. That may have been marginally bad for their health-but it does
not explain the huge jump in the death rate.

Correlation is not causation. Mass privatisation was not the most
important or effective part of "shock therapy" and the rise in death
rates is out of synch with efforts at economic reform. Furthermore,
countries that successfully applied shock therapy, such as Poland, saw
improved life expectancy. So did the then Czechoslovakia, which plumped
for mass privatisation, albeit not very successfully. Mistakes were
made, but Russia's tragedy was that reform came too slowly, not too
fast. 

Feb 5th 2009
From The Economist print edition
http://www.economist.com/opinion/displaystory.cfm?story_id=13055828

Russian mortality

SIR - We take issue with your article about our study, where we show an
increase in mortality associated with rapid mass privatisation in the
post-Soviet period ("Mass murder and the market", January 24th). Your
comments may be explained by your use of a misleading graph of Russian
life expectancy and your lack of awareness of the extensive existing
literature on the other factors you cited, especially alcohol. Our
question was why populations that went through similar political changes
to Russia had extremely different mortality experiences. However
important their similar historical legacies may have been, they cannot
account for the differences in magnitude of the fluctuations in death
rates that occurred in the former Soviet states during the early 1990s.

Our study indicates that one explanatory factor was whether a country
undertook mass privatisation. We know that alcohol was important, but
the crucial question is why did people feel the need to drink
dangerously? Although post-Soviet Russia and Belarus had similar rises
in vodka consumption after the Soviet alcohol monopoly broke up, only in
Russia did unemployment and death rates surge among working-age men. In
these two otherwise similar countries, the pace of privatisation was one
of the few things that differed.

No simple explanation of health exists for any population, and certainly
not for those undergoing rapid transition. Many factors contributed to
the post-communist mortality crisis, but by using evidence rather than
ideology, we are confident that rapid privatisation was one of them.

David Stuckler
Department of sociology
Oxford University
Oxford

Lawrence King
Department of sociology
Cambridge University
Cambridge, Cambridgeshire

Martin McKee
London School of Hygiene and Tropical Medicine
London