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Good bye Lenin (or not?): The effect of Communism on people's preferences

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Alberto Alesina
Nicola Fuchs-Schundeln

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Abstract

Preferences for redistribution, as well as the generosities of welfare states, differ significantly across countries. In this paper, we test whether there exists a feedback process of the economic regime on individual preferences. We exploit the experiment of German separation and reunification to establish exogeneity of the economic system. From 1945 to 1990, East Germans lived under a Communist regime with heavy state intervention and extensive redistribution. We find that, after German reunification, East Germans are more in favor of redistribution and state intervention than West Germans, even after controlling for economic incentives. This effect is especially strong for older cohorts, who lived under Communism for a longer time period. We find that East Germans’ preferences converge towards those of West Germans, and we calculate that it will take one to two generations for preferences to converge completely.

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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 2076.

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Date of creation: 2005
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Handle: RePEc:fth:harver:2076

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 551-84, August. [Downloadable!] (restricted)
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  2. Robert J. Barro & Rachel M. Mccleary, 2005. "Which Countries Have State Religions?," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1331-1370, November. [Downloadable!] (restricted)
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  3. Roland Benabou & Jean Tirole, 2005. "Belief in a Just World and Redistributive Politics," NBER Working Papers 11208, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May. [Downloadable!] (restricted)
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  5. Robert J. Shiller & Maxim Boycko & Vladimir Korobov, 1992. "Hunting for Homo Sovieticus: Situational versus Attitudinal Factors in Economic Behavior," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992-1), pages 127-194. [Downloadable!]
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  6. Marianne Bertrand & Sendhil Mullainathan, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May. [Downloadable!] (restricted)
  7. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January. [Downloadable!] (restricted)
  8. Robert J. Barro & Rachel M. McCleary, 2002. "Religion and Political Economy in an International Panel," NBER Working Papers 8931, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Ockenfels, Axel & Weimann, Joachim, 1999. "Types and patterns: an experimental East-West-German comparison of cooperation and solidarity," Journal of Public Economics, Elsevier, vol. 71(2), pages 275-287, February. [Downloadable!] (restricted)
  10. David G. Blanchflower & Richard Freeman, 1997. "The attitudinal legacy of Communist labor relations," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 50(3), pages 438-459, April.
  11. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July. [Downloadable!] (restricted)
  12. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org. [Downloadable!]
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  13. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June. [Downloadable!] (restricted)
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  14. Robert J. Shiller & Maxim Boycko & Vladimir Korobov, 1991. "Popular Attitudes Towards Free Markets: The Soviet Union and the United States Compared," NBER Working Papers 3453, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Helmut Rainer & Michael Siedler, 2006. "Does democracy foster trust?," Discussion Paper Series, Department of Economics 0602, Department of Economics, University of St. Andrews. [Downloadable!]
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  2. Alberto Chong & Mark Gradstein, 2006. "Redistributional Preferences and Imposed Institutions," RES Working Papers 1061, Inter-American Development Bank, Research Department. [Downloadable!]
  3. Helmut Rainer & Thomas Siedler, 2006. "Does Democracy Foster Trust? Evidence from the German Reunification," Economics Discussion Papers 613, University of Essex, Department of Economics. [Downloadable!]
  4. Chong, Alberto & Gradstein, Mark, 2006. "Imposed Institutions and Preferences for Redistribution," CEPR Discussion Papers 5922, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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