A Different Look at Lenin's Legacy: Trust, Risk, Fairness and Cooperativeness in the Two Germanies

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science. Terms of use: Documents inThe decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly. Guido HeineckInstitute for Employment Research (IAB) and IZA Bernd Süssmuth University of Leipzig and CESifo AbstractWhat are the long-term effects of Communism on economically relevant notions such as social trust? To answer this question, we use the reunification of Germany as a natural experiment and study the post-reunification trajectory of convergence with regard to individuals' trust and risk, as well as perceived fairness and cooperativeness. Our hypotheses are derived from a model of German reunification that incorporates individual responses both to incentives and to values inherited from earlier generations as recently suggested in the literature. Using data from the German Socio-Economic Panel, we find that despite twenty years of reunification East Germans are still characterized by a persistent level of social distrust. In comparison to West Germans, they are also less inclined to see others as fair or helpful. Implied trajectories can be interpreted as evidence for the passing of cultural traits across generations and for cooperation being sustained by values rather than by reputation. Moreover, East Germans are found to be more risk loving than West Germans. In contrast to trust and fairness, full convergence in risk attitude is reached in recent years.JEL Classification: P51, Z31

The Long Shadow of Socialism: On East-West German Differences in Financial Literacy

“…The Stasi monitored the GDR citizens and built a network of civilian informants who were supposed to report politically incorrect behaviour (Rainer and Siedler, 2008). Due to this lack of positive experiences of cooperation, East Germans are still less inclined to see others as fair and are characterised by a high level of social distrust (Heineck and Süssmuth, 2013). Trust can be linked to financial literacy directly and indirectly: A series of papers has related trust and sociability to financial decisions, in particular stock market participation (Hong et al 2004, Guiso et al 2004, Brown et al 2008, Georgarakos and Pasini 2011.…”

Can Television Reduce Xenophobia? The Case of East Germany

“…Over the last decade, economists and political scientists have used the historical devision of East and West Germany as a natural experiment to explain, for example, policy preferences for state intervention and redistribution (Alesina & Fuchs-Schündeln 2007) or individuals' attitudes towards social trust, risk, perceived fairness and cooperativeness (Heineck & Suessmuth 2013). More recently, scholars have also exploited the variation in the availability of West German television within the former German Democratic Republic.…”

Persistence or Convergence? The East—West Tax-Morale Gap in Germany

“…Bauernschuster and Rainer (2012) show a widening of the east-west gap in sex-role attitudes, for example regarding the statement whether it is important for a women to support her husband's career instead of her own. Heineck and Süssmuth (2010) find persistence of a lower level of social trust in East Germany. Contrary, Alesina and Fuchs-Schündeln (2007) report that a stronger preference for social redistribution policies of East Germans converges with the West German level over time.…”

“…Specifically, we study the long-term effect of the political regime and political transition: The period from 1949 to 1990 in East Germany constitutes an exogenous shock of different regimes in two parts of one nation. Thus, observations after the German reunification in 1989/90 provide the opportunity to study a natural experiment (Alesina and Fuchs-Schündeln 2007;Redding and Sturm 2008;Heineck and Süssmuth 2010). The post-merger development of tax morale over time enables us to examine the persistence of an institutional effect on tax morale.…”