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The Joint Effect of Social Comparison and Social Distance on Evaluation of Intertemporal Choice Outcomes in Event-related Potential Studies
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Good Bye Lenin Revisited: East-West Preferences Three Decades after German Reunification
Mariia Bondar1, Nicola Fuchs-Schündeln2
1Charles River Associates, Munich, Germany.
German Economic Review
|March 14, 2023
Summary
Living under Communism versus Capitalism has lasting effects on government preference. East Germans, 27 years post-reunification, still favor redistribution more than West Germans, indicating persistent societal impacts.
Area of Science:
- Social Sciences
- Economics
- Political Science
Background:
- Historical political and economic systems, Communism and Capitalism, can shape long-term societal preferences.
- Understanding these lasting effects is crucial for analyzing contemporary political and economic attitudes.
Purpose of the Study:
- To investigate the enduring impact of living under Communism versus Capitalism on individual preferences for government intervention and redistribution.
- To extend the analysis of Alesina and Fuchs-Schündeln (2007) using the unique context of German reunification.
Main Methods:
- Utilizing the natural experiment of German reunification to compare preference divergence and convergence between East and West Germans.
- Analyzing survey data 27 years after reunification to assess current preferences for redistribution.
- Examining generational cohorts born after reunification to identify intergenerational transmission patterns.
Main Results:
- East Germans exhibit stronger preferences for redistribution compared to West Germans, even 27 years after reunification.
- While preference convergence is observed, its rate significantly diminishes over time.
- Individuals born after reunification show a notable intergenerational transmission of these distinct preferences.
Conclusions:
- The experience of living under Communism versus Capitalism has profound and lasting effects on preferences for government strength and redistribution.
- Preference convergence between formerly distinct systems is a slow process, with significant intergenerational persistence.
- Policy and social interventions may need to account for these deeply ingrained, historically influenced preferences.
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