Working Paper: CEPR ID: DP14470
Authors: Sascha O. Becker; Lukas Mergele; Ludger Woessmann
Abstract: German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.
Keywords: political systems; communism; preferences; culture; germany
JEL Codes: D72; H11; P26; P36; N44
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Pre-existing socioeconomic differences (I24) | economic outcomes (F61) |
| Pre-existing socioeconomic differences (I24) | political preferences (D72) |
| Pre-existing socioeconomic differences (I24) | cultural traits (Z13) |
| Differential treatment during World War II (J79) | economic disparities (I24) |
| War-related damages in East Germany (H56) | economic development (O29) |
| Selective migration from East to West Germany (F22) | population attitudes toward communism (P20) |
| Selective migration from East to West Germany (F22) | assessment of communism's impact (P30) |