Objective: First, to identify risks associated with the scientific evaluation of drugs considered... more Objective: First, to identify risks associated with the scientific evaluation of drugs considered for state reimbursement in Poland through exploring strategies of influence employed by multinational drug companies in relation to the Agency for Health Technology Assessment (AHTAPol). Second, to ascertain whether the outcomes of drug evaluation meet the interests of the public payer in reimbursing cost-effective drugs supported by robust pharmacoeconomic evidence. Methodology: We conducted 109 in-depth semi-structured interviews with a purposive sample of stakeholders involved in the reimbursement process in Poland. We analysed four available documentary sources, including recommendations issued by the AHTAPol. Results: AHTAPol recommendations were an instrumental part of the blame avoidance strategy by political elites. Drug producers utilised direct and indirect strategies of influence. The direct strategies involved building relationships with a circle of health technology assessment analysts and medical experts working for the Agency. The indirect strategies employed leaders of opinion in the medical milieu, patient organisations, and political elites to endorse policy positions favourable to drug companies. The AHTAPol positively recommended an increasing proportion of the drugs it assessed, many of them reported as not cost-effective or supported by dubious pharmacoeconomic evidence. Conclusions: The strategies of influence entail a number of risks that may undermine the scientific evaluation of drugs. Some outcomes of drug evaluation may favour the interests of multinational drug companies over those of the public payer. We suggest that the risks involved in drug evaluation might be mitigated through (1) professionalization of health technology assessment; (2) restriction of job seeking and post public-payer employment;
Why did the transitions from state socialism to capitalism result in improved growth in some coun... more Why did the transitions from state socialism to capitalism result in improved growth in some countries but significant economic declines in others? Three main arguments have been advanced: (1) the most successful countries rapidly implemented privatization, liberalization, and stabilization policies; (2) failures were unrelated to economic policies but occurred because of a poor institutional environment; and (3) the policies were counterproductive because they damaged the state. We present a state-centered theory which argues that the more radical the privatization program, the worse the subsequent performance. We agree with the second account, that institutions matter, but demonstrate that it was radical privatization itself which was a major determinant of institutional weakness. In addition, our account holds that privatization was in fact a crucial determinant of institutional failure, operating primarily through the creation of a massive shock to state revenues. We perform cross-national regressions for a sample of 30 countries between 1990 and 2000, and find that mass privatization programs negatively impacted economic growth, state capacity and property rights protection. These findings are corroborated with data from a random sample of 4,000 firms from 26 postcommunist countries. We show that in countries which implemented sizable mass-privatized programs, privatized firms were substantially less likely to engage in successful industrial restructuring but considerably more likely to engage in barter and have tax arrears than their state owned counterparts.
This paper evaluates the role of foreign direct investment (FDI) in the transition from socialism... more This paper evaluates the role of foreign direct investment (FDI) in the transition from socialism to capitalism. Fixed-effects panel regressions indicate that FDI and domestic investment have an equal effect on growth in the first year of investment, but over time FDI is associated with greater growth than domestic investment. However, this positive impact of FDI turns out to be contingent upon the presence of a relatively well-functioning state in the host economy; in the absence of such a state, the net effect of FDI on economic development may be negative. All findings are robust in light of instrumental variable estimation, which is used to account for potential endogeneity problems.
It is not well understood how economic crises affect infectious disease incidence and prevalence,... more It is not well understood how economic crises affect infectious disease incidence and prevalence, particularly among vulnerable groups. Using a susceptible-infected-recovered framework, we systematically reviewed literature on the impact of the economic crises on infectious disease risks in migrants in Europe, focusing principally on HIV, TB, hepatitis and other STIs. We conducted two searches in PubMed/Medline, Web of Science, Cochrane Library, Google Scholar, websites of key organizations and grey literature to identify how economic changes affect migrant populations and infectious disease. We perform a narrative synthesis in order to map critical pathways and identify hypotheses for subsequent research. The systematic review on links between economic crises and migrant health identified 653 studies through database searching; only seven met the inclusion criteria. Fourteen items were identified through further searches. The systematic review on links between economic crises and i...
The paper analyses the 20-year experience with transition in the SEE countries in a comparative f... more The paper analyses the 20-year experience with transition in the SEE countries in a comparative framework, illustrating how these countries encountered difficulties in its implementation, despite having some of the best starting conditions in 1989 to impl
This article critiques neoliberal transition theory from a state-centered perspective. Neoliberal... more This article critiques neoliberal transition theory from a state-centered perspective. Neoliberal scholars have used cross-national regression analysis to argue that postcommunist economic failure is the result of inadequate adherence to neoliberal precepts. Sociologists, in turn, have relied on case study data to show that postcommunist economic failure is the outcome of too close adherence to neoliberal policy recommendations, which has led to an erosion of state effectiveness, and thus produced underdevelopment. The present paper advances a version of this statist theory based on a quantitative analysis of mass privatization programs in the postcommunist world. We argue that the neoliberal policy of rapid large-scale privatization creates severe supply and demand shocks for enterprises, thereby inducing firm failure. The resulting erosion of tax revenues leads to a fiscal crisis for the state, and severely weakens its capacity and bureaucratic character. This, in turn, reacts bac...
Neoliberals argue that rapid liberalization and privatization can transform postcommunist economi... more Neoliberals argue that rapid liberalization and privatization can transform postcommunist economies into Western-style capitalist systems. Organizational sociologists argue that these policies pro- duce a unique variety of capitalism, while world-systems theorists argue that they lead to underdevelopment. This article advances a social structural alternative in a crucial case. Poland's relative eco- nomic success resulted from prolonged state ownership and an
This article critiques neoliberal transition theory from a neoclassical sociological perspective.... more This article critiques neoliberal transition theory from a neoclassical sociological perspective. Neoliberals argue that postcommunist economic failure is the result of inadequate adherence to neoliberal precepts. This paper argues that the neoliberal policy package of "Shock Therapy" (consisting of the radical transition to a market economy through rapid and extensive price and trade liberalization, stringent monetary and fiscal stabilization, and the implementation of a mass privatization program) creates severe supply-and-demand shocks for enterprises, inducing firm failure. This leads to a fiscal crisis for the state, and an erosion of its capacity and bureaucratic character. This in turn reacts back on the enterprise sector, since the state can no longer support the institutions necessary for the effective functioning of capitalist economies. The neoliberal theory is tested against a neoclassical sociological theory by examining the experience of 12 postcommunist countries and two reform Asian communist countries.
Methods We used multivariate longitudinal regression to analyse age-standardised mortality rates ... more Methods We used multivariate longitudinal regression to analyse age-standardised mortality rates in working-age men (15-59 years) in post-communist countries of eastern Europe and the former Soviet Union from 1989 to 2002. We defined mass privatisation programmes as transferring at least 25% of large state-owned enterprises to the private sector within 2 years with the use of vouchers and give-aways to
Although both the academic and policy communities have attached great importance to measuring co... more Although both the academic and policy communities have attached great importance to measuring corruption, most of the currently available measures are biased and too broad to test theory or guide policy. This article proposes a new composite indicator of grand corruption based on a wide range of elementary indicators. These indicators are derived from qualitative evidence on public procurement corruption and a statistical analysis of a public procurement data in Hungary. The composite indicator is constructed by linking public procurement process ‘red flags’ to restrictions of market access. This method utilizes administrative data that is available in practically every developed country and avoids the pitfalls both of perception based indicators and previous ‘objective’ measures of corruption. It creates an estimation of institutionalised grand corruption that is consistent over time and across countries. The composite indicator is validated using company profitability and political connections data.
The Corruption Research Center Budapest was created in November 2013 in response to the growing n... more The Corruption Research Center Budapest was created in November 2013 in response to the growing need for independent research on corruption and quality of government in Hungary. The central aim of the Center is to systematically explore the causes, characteristics, and consequences of low quality of government, corruption, and regulatory failure using an inter-disciplinary approach. In addition, the Center also aims to help citizens to hold governments accountable through the use of robust evidence. Our unique research approach combines qualitative and quantitative methods to analyse micro-level actor behaviour and generates novel hard data on the phenomena under scrutiny. Corruption Research Center Budapest: https://www.crcb.eu/ ABSTRACT Corruption manual for beginners: "Corruption techniques" in public procurement with examples from Hungary 4 This paper develops 30 novel quantitative indicators of grand corruption that operationalize 20 distinct techniques of corruption in the context of public procurement. Each indicator rests on a thorough qualitative understanding of rent extraction from public contracts by corrupt networks as evidenced by academic literature, interviews and media content analysis. Feasibility and usefulness of the proposed indicators are demonstrated using micro-level public procurement data from Hungary in 2009-2012. While the prime value of this broad set of indicators is the possibility of combining them into a robust composite indicator of highlevel corruption, the high degree of detail also reveals that many regulatory interventions have succeeded in changing the form of corruption, but not its overall incidence. JEL classification: D72, D73, H57,
During the early-1990s, adult mortality rates rose in most post-communist European countries. Sub... more During the early-1990s, adult mortality rates rose in most post-communist European countries. Substantial differences across countries and over time remain unexplained. Although previous studies have suggested that the pace of economic transition was a key driver of increased mortality rates, to our knowledge no study has empirically assessed the role of specific components of transition policies. We investigated whether mass privatisation can account for differences in adult mortality rates in such countries. We used multivariate longitudinal regression to analyse age-standardised mortality rates in working-age men (15-59 years) in post-communist countries of eastern Europe and the former Soviet Union from 1989 to 2002. We defined mass privatisation programmes as transferring at least 25% of large state-owned enterprises to the private sector within 2 years with the use of vouchers and give-aways to firm insiders. To isolate the effect of mass privatisation, we used models to contr...
The relationship between health policy in low-income countries (LICs) and structural adjustment p... more The relationship between health policy in low-income countries (LICs) and structural adjustment programs devised by the International Monetary Fund (IMF) has been the subject of intense controversy over past decades. While the influence of the IMF on health policy can operate through various pathways, one main link is via public spending on health. The IMF has claimed that its programs enhance government spending for health, and that a number of innovations have been introduced to enable borrowing countries to protect health spending from broader austerity measures. Critics have pointed to adverse effects of Fund programs on health spending or to systematic underfunding that does not allow LICs to address health needs. We examine the effects of Fund programs on government expenditures on health in low-income countries using data for the period 1985-2009. We find that Fund programs are associated with higher health expenditures only in Sub-Saharan African LICs, which historically spent less than any other region. This relationship turns negative in LICs in other regions. We outline the implications of these findings for health policy in a development context.
The paper explores the impact of EU funds on institutionalised grand corruption in public procure... more The paper explores the impact of EU funds on institutionalised grand corruption in public procurement during 2009-2012 in three countries: Czech Republic, Hungary, and Slovakia. We analyse a unique pooled database containing contract-level public procurement information for all three countries. We develop a composite corruption risks indicator based on the incidence and logical structure of ‘red flags’ in individual public procurement transactions. Preliminary findings indicate that EU funds impact institutionalised grand corruption, first, by providing additional public resources available for corrupt rent extraction; second, by changing the motivations for and controls of corruption for the additional resources. Preliminary calculations indicate that the first effect increases the value of particularistic resource allocation by up to 1.23% of GDP, while the second effect decreases it by up to 0.03% of GDP. The latter effect is entirely driven by Slovakia; in Czech Republic and Hungary even this effect increases particularism. The negative effect of EU Funds on controlling corruption call for carefully balancing the economic benefits with substantial governance costs.
Objective: First, to identify risks associated with the scientific evaluation of drugs considered... more Objective: First, to identify risks associated with the scientific evaluation of drugs considered for state reimbursement in Poland through exploring strategies of influence employed by multinational drug companies in relation to the Agency for Health Technology Assessment (AHTAPol). Second, to ascertain whether the outcomes of drug evaluation meet the interests of the public payer in reimbursing cost-effective drugs supported by robust pharmacoeconomic evidence. Methodology: We conducted 109 in-depth semi-structured interviews with a purposive sample of stakeholders involved in the reimbursement process in Poland. We analysed four available documentary sources, including recommendations issued by the AHTAPol. Results: AHTAPol recommendations were an instrumental part of the blame avoidance strategy by political elites. Drug producers utilised direct and indirect strategies of influence. The direct strategies involved building relationships with a circle of health technology assessment analysts and medical experts working for the Agency. The indirect strategies employed leaders of opinion in the medical milieu, patient organisations, and political elites to endorse policy positions favourable to drug companies. The AHTAPol positively recommended an increasing proportion of the drugs it assessed, many of them reported as not cost-effective or supported by dubious pharmacoeconomic evidence. Conclusions: The strategies of influence entail a number of risks that may undermine the scientific evaluation of drugs. Some outcomes of drug evaluation may favour the interests of multinational drug companies over those of the public payer. We suggest that the risks involved in drug evaluation might be mitigated through (1) professionalization of health technology assessment; (2) restriction of job seeking and post public-payer employment;
Why did the transitions from state socialism to capitalism result in improved growth in some coun... more Why did the transitions from state socialism to capitalism result in improved growth in some countries but significant economic declines in others? Three main arguments have been advanced: (1) the most successful countries rapidly implemented privatization, liberalization, and stabilization policies; (2) failures were unrelated to economic policies but occurred because of a poor institutional environment; and (3) the policies were counterproductive because they damaged the state. We present a state-centered theory which argues that the more radical the privatization program, the worse the subsequent performance. We agree with the second account, that institutions matter, but demonstrate that it was radical privatization itself which was a major determinant of institutional weakness. In addition, our account holds that privatization was in fact a crucial determinant of institutional failure, operating primarily through the creation of a massive shock to state revenues. We perform cross-national regressions for a sample of 30 countries between 1990 and 2000, and find that mass privatization programs negatively impacted economic growth, state capacity and property rights protection. These findings are corroborated with data from a random sample of 4,000 firms from 26 postcommunist countries. We show that in countries which implemented sizable mass-privatized programs, privatized firms were substantially less likely to engage in successful industrial restructuring but considerably more likely to engage in barter and have tax arrears than their state owned counterparts.
This paper evaluates the role of foreign direct investment (FDI) in the transition from socialism... more This paper evaluates the role of foreign direct investment (FDI) in the transition from socialism to capitalism. Fixed-effects panel regressions indicate that FDI and domestic investment have an equal effect on growth in the first year of investment, but over time FDI is associated with greater growth than domestic investment. However, this positive impact of FDI turns out to be contingent upon the presence of a relatively well-functioning state in the host economy; in the absence of such a state, the net effect of FDI on economic development may be negative. All findings are robust in light of instrumental variable estimation, which is used to account for potential endogeneity problems.
It is not well understood how economic crises affect infectious disease incidence and prevalence,... more It is not well understood how economic crises affect infectious disease incidence and prevalence, particularly among vulnerable groups. Using a susceptible-infected-recovered framework, we systematically reviewed literature on the impact of the economic crises on infectious disease risks in migrants in Europe, focusing principally on HIV, TB, hepatitis and other STIs. We conducted two searches in PubMed/Medline, Web of Science, Cochrane Library, Google Scholar, websites of key organizations and grey literature to identify how economic changes affect migrant populations and infectious disease. We perform a narrative synthesis in order to map critical pathways and identify hypotheses for subsequent research. The systematic review on links between economic crises and migrant health identified 653 studies through database searching; only seven met the inclusion criteria. Fourteen items were identified through further searches. The systematic review on links between economic crises and i...
The paper analyses the 20-year experience with transition in the SEE countries in a comparative f... more The paper analyses the 20-year experience with transition in the SEE countries in a comparative framework, illustrating how these countries encountered difficulties in its implementation, despite having some of the best starting conditions in 1989 to impl
This article critiques neoliberal transition theory from a state-centered perspective. Neoliberal... more This article critiques neoliberal transition theory from a state-centered perspective. Neoliberal scholars have used cross-national regression analysis to argue that postcommunist economic failure is the result of inadequate adherence to neoliberal precepts. Sociologists, in turn, have relied on case study data to show that postcommunist economic failure is the outcome of too close adherence to neoliberal policy recommendations, which has led to an erosion of state effectiveness, and thus produced underdevelopment. The present paper advances a version of this statist theory based on a quantitative analysis of mass privatization programs in the postcommunist world. We argue that the neoliberal policy of rapid large-scale privatization creates severe supply and demand shocks for enterprises, thereby inducing firm failure. The resulting erosion of tax revenues leads to a fiscal crisis for the state, and severely weakens its capacity and bureaucratic character. This, in turn, reacts bac...
Neoliberals argue that rapid liberalization and privatization can transform postcommunist economi... more Neoliberals argue that rapid liberalization and privatization can transform postcommunist economies into Western-style capitalist systems. Organizational sociologists argue that these policies pro- duce a unique variety of capitalism, while world-systems theorists argue that they lead to underdevelopment. This article advances a social structural alternative in a crucial case. Poland's relative eco- nomic success resulted from prolonged state ownership and an
This article critiques neoliberal transition theory from a neoclassical sociological perspective.... more This article critiques neoliberal transition theory from a neoclassical sociological perspective. Neoliberals argue that postcommunist economic failure is the result of inadequate adherence to neoliberal precepts. This paper argues that the neoliberal policy package of "Shock Therapy" (consisting of the radical transition to a market economy through rapid and extensive price and trade liberalization, stringent monetary and fiscal stabilization, and the implementation of a mass privatization program) creates severe supply-and-demand shocks for enterprises, inducing firm failure. This leads to a fiscal crisis for the state, and an erosion of its capacity and bureaucratic character. This in turn reacts back on the enterprise sector, since the state can no longer support the institutions necessary for the effective functioning of capitalist economies. The neoliberal theory is tested against a neoclassical sociological theory by examining the experience of 12 postcommunist countries and two reform Asian communist countries.
Methods We used multivariate longitudinal regression to analyse age-standardised mortality rates ... more Methods We used multivariate longitudinal regression to analyse age-standardised mortality rates in working-age men (15-59 years) in post-communist countries of eastern Europe and the former Soviet Union from 1989 to 2002. We defined mass privatisation programmes as transferring at least 25% of large state-owned enterprises to the private sector within 2 years with the use of vouchers and give-aways to
Although both the academic and policy communities have attached great importance to measuring co... more Although both the academic and policy communities have attached great importance to measuring corruption, most of the currently available measures are biased and too broad to test theory or guide policy. This article proposes a new composite indicator of grand corruption based on a wide range of elementary indicators. These indicators are derived from qualitative evidence on public procurement corruption and a statistical analysis of a public procurement data in Hungary. The composite indicator is constructed by linking public procurement process ‘red flags’ to restrictions of market access. This method utilizes administrative data that is available in practically every developed country and avoids the pitfalls both of perception based indicators and previous ‘objective’ measures of corruption. It creates an estimation of institutionalised grand corruption that is consistent over time and across countries. The composite indicator is validated using company profitability and political connections data.
The Corruption Research Center Budapest was created in November 2013 in response to the growing n... more The Corruption Research Center Budapest was created in November 2013 in response to the growing need for independent research on corruption and quality of government in Hungary. The central aim of the Center is to systematically explore the causes, characteristics, and consequences of low quality of government, corruption, and regulatory failure using an inter-disciplinary approach. In addition, the Center also aims to help citizens to hold governments accountable through the use of robust evidence. Our unique research approach combines qualitative and quantitative methods to analyse micro-level actor behaviour and generates novel hard data on the phenomena under scrutiny. Corruption Research Center Budapest: https://www.crcb.eu/ ABSTRACT Corruption manual for beginners: "Corruption techniques" in public procurement with examples from Hungary 4 This paper develops 30 novel quantitative indicators of grand corruption that operationalize 20 distinct techniques of corruption in the context of public procurement. Each indicator rests on a thorough qualitative understanding of rent extraction from public contracts by corrupt networks as evidenced by academic literature, interviews and media content analysis. Feasibility and usefulness of the proposed indicators are demonstrated using micro-level public procurement data from Hungary in 2009-2012. While the prime value of this broad set of indicators is the possibility of combining them into a robust composite indicator of highlevel corruption, the high degree of detail also reveals that many regulatory interventions have succeeded in changing the form of corruption, but not its overall incidence. JEL classification: D72, D73, H57,
During the early-1990s, adult mortality rates rose in most post-communist European countries. Sub... more During the early-1990s, adult mortality rates rose in most post-communist European countries. Substantial differences across countries and over time remain unexplained. Although previous studies have suggested that the pace of economic transition was a key driver of increased mortality rates, to our knowledge no study has empirically assessed the role of specific components of transition policies. We investigated whether mass privatisation can account for differences in adult mortality rates in such countries. We used multivariate longitudinal regression to analyse age-standardised mortality rates in working-age men (15-59 years) in post-communist countries of eastern Europe and the former Soviet Union from 1989 to 2002. We defined mass privatisation programmes as transferring at least 25% of large state-owned enterprises to the private sector within 2 years with the use of vouchers and give-aways to firm insiders. To isolate the effect of mass privatisation, we used models to contr...
The relationship between health policy in low-income countries (LICs) and structural adjustment p... more The relationship between health policy in low-income countries (LICs) and structural adjustment programs devised by the International Monetary Fund (IMF) has been the subject of intense controversy over past decades. While the influence of the IMF on health policy can operate through various pathways, one main link is via public spending on health. The IMF has claimed that its programs enhance government spending for health, and that a number of innovations have been introduced to enable borrowing countries to protect health spending from broader austerity measures. Critics have pointed to adverse effects of Fund programs on health spending or to systematic underfunding that does not allow LICs to address health needs. We examine the effects of Fund programs on government expenditures on health in low-income countries using data for the period 1985-2009. We find that Fund programs are associated with higher health expenditures only in Sub-Saharan African LICs, which historically spent less than any other region. This relationship turns negative in LICs in other regions. We outline the implications of these findings for health policy in a development context.
The paper explores the impact of EU funds on institutionalised grand corruption in public procure... more The paper explores the impact of EU funds on institutionalised grand corruption in public procurement during 2009-2012 in three countries: Czech Republic, Hungary, and Slovakia. We analyse a unique pooled database containing contract-level public procurement information for all three countries. We develop a composite corruption risks indicator based on the incidence and logical structure of ‘red flags’ in individual public procurement transactions. Preliminary findings indicate that EU funds impact institutionalised grand corruption, first, by providing additional public resources available for corrupt rent extraction; second, by changing the motivations for and controls of corruption for the additional resources. Preliminary calculations indicate that the first effect increases the value of particularistic resource allocation by up to 1.23% of GDP, while the second effect decreases it by up to 0.03% of GDP. The latter effect is entirely driven by Slovakia; in Czech Republic and Hungary even this effect increases particularism. The negative effect of EU Funds on controlling corruption call for carefully balancing the economic benefits with substantial governance costs.
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Papers by Lawrence King