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

Author

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  • Guido Heineck
  • Bernd Süssmuth

Abstract

What 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.

Suggested Citation

  • 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.
  • Handle: RePEc:ces:ceswps:_3199
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp3199.pdf
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    References listed on IDEAS

    as
    1. Bernd Süssmuth & Malte Heyne & Wolfgang Maennig, 2010. "Induced Civic Pride and Integration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 202-220, April.
    2. Simon Gaechter & Benedikt Herrmann & Christian Thoeni, 2010. "Culture and Cooperation," Discussion Papers 2010-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
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    Cited by:

    1. Guido Heineck & Bernd Süßmuth, 2011. "Wie nachhaltig prägen uns politische Systeme? Evidenz aus der zweiten Dekade des Wiedervereinigungsprozesses," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(02), pages 23-26, April.
    2. 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.
    3. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    4. 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.
    5. 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..
    6. 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).
    7. Kuhn, Andreas, 2011. "Inequality Perceptions, Distributional Norms, and Redistributive Preferences in East and West Germany," IZA Discussion Papers 5573, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    social trust; risk attitudes; political regimes; German reunification;

    JEL classification:

    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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