A Different Look at Lenin's Legacy: Trust, Risk, Fairness and Cooperativeness in the Two Germanies
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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5219.
Length: 42 pages
Date of creation: Sep 2010
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Other versions of this item:
- Guido Heineck & Bernd Süssmuth, 2010. "A Different Look at Lenin's Legacy: Trust, Risk, Fairness and Cooperativeness in the Two Germanies," SOEPpapers on Multidisciplinary Panel Data Research 345, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Guido Heineck & Bernd Süssmuth, 2010. "A Different Look at Lenin's Legacy: Trust, Risk, Fairness and Cooperativeness in the two Germanies," CESifo Working Paper Series 3199, CESifo Group Munich.
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-09 (All new papers)
- NEP-CBE-2010-10-09 (Cognitive & Behavioural Economics)
- NEP-CIS-2010-10-09 (Confederation of Independent States)
- NEP-SOC-2010-10-09 (Social Norms & Social Capital)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Andrea Leuermann & Sarah Necker, 2011. "Intergenerational Transmission of Risk Attitudes: A Revealed Preference Approach," SOEPpapers on Multidisciplinary Panel Data Research 412, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Guido Heineck & Bernd Süßmuth, 2011. "Wie nachhaltig prägen uns politische Systeme? Evidenz aus der zweiten Dekade des Wiedervereinigungsprozesses," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 18(02), pages 23-26, 04.
- Andreas Kuhn, 2011. "Inequality Perceptions, Distributional Norms, and Redistributive Preferences in East and West Germany," NRN working papers 2011-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- Leuermann, Andrea & Necker, Sarah, 2011. "Intergenerational transmission of risk attitudes: A revealed preference approach," Freiburg Discussion Papers on Constitutional Economics 11/4, Walter Eucken Institut e.V..
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