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Discussion Paper Details

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Title: The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism

Author(s): Sascha O. Becker, Lukas Mergele and Ludger Woessmann

Publication Date: March 2020

Keyword(s): Communism, Culture, Germany, Political Systems and preferences

Programme Area(s): Economic History, Labour Economics and Macroeconomics and Growth

Abstract: German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.

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Bibliographic Reference

Becker, S, Mergele, L and Woessmann, L. 2020. 'The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14470