Trust we lost: The impact of the Treuhand experience on political alienation in East GermanyKim Leonie Kellermann Journal of Comparative Economics, 2024, vol. 52, issue 1, 54-75 Abstract: Do politically administered mass layoffs undermine trust and political interest? During the German reunification, formerly state-owned socialist firms in East Germany were privatized by the Treuhand, which came at the cost of massive job losses and public protest. We demonstrate that these activities had a detrimental effect on attitudes and political behavior of the affected individuals. Using survey data from the German Socio-economic Panel and election results, we find that East Germans who lost their jobs exhibit significantly lower trust levels, lower political interest and a lower identification with mainstream democratic parties, even up to 30 years after reunification. We corroborate the causality of the results using fixed-effects estimations and a placebo analysis, which fails to explain political disenchantment by reasons other than the Treuhand experience. We interpret the findings as the persistent, negative effect of perceived political mismanagement during a crucial phase of economic transition on long-run political identification. Keywords: East Germany; Privatization; Political alienation; Trust; Radical voting (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:52:y:2024:i:1:p:54-75 DOI: 10.1016/j.jce.2023.10.001 Access Statistics for this article Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland More articles in Journal of Comparative Economics from Elsevier |
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