Some people think so.
This is, in caricature, the controversial thesis offered by David Stuckler, Lawrence King and Martin McKee, in The Lancet recently. The scientists – Dr Stuckler and Dr King are sociologists at Oxford and Cambridge respectively, and McKee is Professor of European Public Health at the London School of Hygiene and Tropical Medicine – claim that hasty mass privatisation in several former Eastern bloc and Soviet states coincides convincingly with a spike in their death rates. They speculate the main link between the two is unemployment, a well established cause of ill health and stress, as well as a trigger for life-shortening behaviour, such as binge drinking.
Interesting theory….but wrong. Which is what you might expect when two sociologists and an epidemiologist try to discover an economic causation. The correlation is certainly there, but the causation, not so much.
But there is a very obvious question to do with causality: How could changing ownership from state to private have raised mortality? The authors of the Lancet article put forward the theory that privatised firms cut employment and then refer to the extensive evidence on the negative impact of unemployment on health to link job loss to mortality. This idea in turn raises the question: Did privatisation systematically lead to substantial job loss? If not, then the causal mechanism of the paper breaks down and the article\’s results are open to question. Note that the Lancet article provides no evidence on this question.
So did privatisation lead to substantial job loss? In a column at VoxEU.org John S. Earle says the answer is a clear "no". The column, "Mass privatisation and mortality: Is job loss the link?", looks at the results of a study forthcoming in the Economic Journal. This study is "Employment and Wage Effects of Privatisation: Evidence from Hungary, Romania, Russia, and Ukraine" by David J. Brown, John S. Earle and Almos Telegdy.
As, err, privatisation did not lead to massive job losses therefore privatisation cannot be blamed for the mass unemployment that it didn\’t cause nor the supposed effects of mass unemployment upon death rates.