Establishing A New State under Human Resource Constraint: The Experience of the German Reunification

The human resources of East Germany were short in the terms of political integrity and professional qualification to establish the new public institutions modeled to those of West Germany. Dispatching West-German personnel, extensive re-training, and creation of informal personal network were the solution to compensate the shortage and to transfer knowledge and know-hows to East Germany. Reunified Germany established the new public institutions quickly, although the sudden change might discourage East-German personnel’s self-efforts to improve their capacities. The German experience suggests that it is difficult for the other ex-socialist countries those cannot expect quick transfer of knowledge and know-hows from the democratic market countries to establish their new public institutions quickly. It would take a long time of a generation and more for those countries to complete the systemic transformations, because the accumulation of the human capital needs the long period., Highlights: ・Human capital for operating state institutions is short in systemic transformation. ・Transfer of knowledge and know-hows is needed to solve the problem. ・Dispatching West-German personnel, re-training, and informal network solved it. ・Applying the German solution to the other ex-socialist countries are difficult. ・A generation or more are needed to complete the systemic transformation.