Privatizations Spark Socialist Backlash: Evidence from East Germany

• In Event: The Fall of Communism and Its Effect on Radical Voting: Evidence from Germany

Abstract

The fall of the Berlin Wall brought the end of socialism, yet pro-socialist sentiment regained momentum surprisingly quickly. Why did voters move back to an ideology that was associated with rigged elections and lackluster economic performance? This paper points to the rushed privatization of East European economies as one plausible driver of the revival of socialist voting. Using micro-level data from East Germany, we show that firm privatizations led to a marked resurgence of the former Socialist Unity Party. We argue that this effect is likely due to perceived injustice: Socialist voting thrived whenever firms were sold to Western elites, which East Germans took as a sign that the system is tilted against ordinary citizens.

Authors

• Anselm Hager, Humboldt-Universität zu Berlin

• Werner Krause, WZB Berlin Social Science Center