Free DP Download 03 October 2019 - TRANSITION FROM PLAN TO MARKET CAUSED MAJOR DEPRIVATION IN FORMER COMMUNIST COUNTRIES

Thursday, October 3, 2019

TRANSITION FROM PLAN TO MARKET, HEIGHT AND WELL-BEING 
Alicia Adsera Ribera, Francesca Dalla Pozza, Sergei Guriev, Lukas Kleine-Rueschkamp, Elena Nikolova   
CEPR DP No. 14027 | 25 September 2019

A new CEPR study by Alicia Ribera, Francesca Pozza, Sergei Guriev, Lukas Kleine-Rueschkamp and Elena Nikolova re-evaluates the impact of transition from a planned economy to a market economy in former communist countries on people’s health and wellbeing. 

The results show clear evidence of the high social cost of early transition reforms: cohorts born around the start of transition are shorter than their older or younger peers. The difference in height suggests that the first years of reforms in post-communist countries were accompanied by major deprivation.

The study provides suggestive evidence for the importance of three mechanisms that partly explain these results: the decline of GDP per capita; the deterioration of healthcare systems; and food scarcity. 

On a positive note, the data show that cohorts that experienced transition in their infancy are now better educated and more satisfied with their lives than their counterparts. Overall, the results imply that the transition process has been a traumatic experience, but that its negative impact has largely been overcome.

Figure 1: Countries of origin


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