A theory of why potentially favourable political and economic changes may lead to mortality crises

Giovanni Cornia

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: Potentially positive systemic economic and political changes may entail large transitional health costs. These have often been underestimated ex- ante and are often neglected ex-post by incumbent governments. With the aim of drawing lessons for future transformations and the action of policy makers, the paper reviews six past and current episodes of political, economic and social transformation that were expected to generate greater political freedom, economic prosperity and individual wellbeing, but that instead generated substantial increases in death rates, particularly among low-income groups. The paper suggests that the frequency of such type of crises might increase in the future owing to the current acceleration of economic, social, demographic and technological change. The paper presents a taxonomy of causal factors behind the mortality crises that followed potentially positive political and economic reforms expected to move a country from a low social equilibrium to a higher one. The taxonomy of factors responsible for the discrepancy between ex-ante expectations and ex-post outcomes includes the unexpected effects of rural- urban migration combined with an inelastic supply of public infrastructure; political reforms carried out in the absence of adequate administrative, legal and redistributive institutions; the introduction of economic reforms under conditions of incomplete or distorted markets and institutions; and the unchecked contact between socio-economic groups characterized by different disease profiles. The impact of the lack of democratic institutions is also explored when data allow. Particular attention is placed on the transition to the market economy and liberal democracy of the former European communist countries. Between 1990 and 2014, the transition generated aggregate excess deaths of 17 million, of which only a modest part was due to population aging. Despite its magnitude and a growing number of studies, the transition mortality crisis has attracted limited attention by national authorities and international agencies. When it was acknowledged, it was often attributed to past shocks or irrelevant factors retarding in his way the introduction of an adequate policy response. Thus, unless actively managed by incumbent governments, the transition from a low to a high socio- economic equilibrium may generate large health and social costs.

Pages: 54 pages
Date: 2019
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