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Cultural differences between East and West Germany after 1991: Communist values versus economic performance?

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  • van Hoorn, André
  • Maseland, Robbert

Abstract

Two decades after reunification substantial economic disparities between East and West Germany remain. With formal institutions being equalized, a typical explanation is that the partition of Germany created differences in economic values and attitudes that continue to feed differences in economic performance. Empirical work using values surveys to investigate the extent to which values differ between East and West has thus far produced mixed findings. We use individual-level panel data to assess East and West German value preferences by investigating how individuals from each group differentially transform situational factors into happiness. This novel method of assessing value differences shows that preferences indeed vary between East and West Germans. However, this variation is not in line with the differences associated with the gap in economic performance; if anything, Easterners appear to entertain values more conducive to economic growth. This suggests that the belief that economic differences between Eastern and Western Germany are a result of a Communist cultural legacy may be largely a myth.

Suggested Citation

  • van Hoorn, André & Maseland, Robbert, 2010. "Cultural differences between East and West Germany after 1991: Communist values versus economic performance?," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 791-804, December.
  • Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:791-804
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    Cited by:

    1. Petrunyk Inna & Pfeifer Christian, 2016. "Life Satisfaction in Germany After Reunification: Additional Insights on the Pattern of Convergence," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 217-239, March.
    2. van Hoorn, Andr, 2016. "Reliability and validity of the happiness approach to measuring preferences," Research Report 16008-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    3. Thomas P. Triebs & Justin Tumlinson, 2013. "Learning Capitalism the Hard Way--Evidence from German Reunification," NBER Working Papers 19209, National Bureau of Economic Research, Inc.
    4. van Hoorn, André & Maseland, Robbert, 2013. "Does a Protestant work ethic exist? Evidence from the well-being effect of unemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 1-12.
    5. Michael Wyrwich & Michael Stuetzer & Rolf Sternberg, 2016. "Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: a tale of two regions," Small Business Economics, Springer, vol. 46(3), pages 467-492, March.
    6. de Jong, Gjalt & van Houten, Jerry, 2014. "The impact of MNE cultural diversity on the internationalization-performance relationship," International Business Review, Elsevier, vol. 23(1), pages 313-326.
    7. Beugelsdijk, Sjoerd & Klasing, Mariko J., 2016. "Diversity and trust: The role of shared values," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 522-540.

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