TITLE

PŘÍČINY NEKONVERGENCE BÝVALÉ NDR

AUTHOR(S)
Kouba, Luděk; Křížová, Hana
PUB. DATE
March 2013
SOURCE
E + M Ekonomie a Management / E+M Economics & Management;2013, Vol. 2013 Issue 1, p5
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
In 1990, East Germany had significant preconditions for successful economic development and rapid convergence: the former GDR was the most developed country in the former Soviet bloc and had a long tradition of cultural affiliation with the West. Moreover, its centrally planned economy obtained a complete institutional framework of a capitalist economy of the FRG at the moment of reunification and consecutively got long-term financial support from West Germany. Nevertheless, the real economic results during the last two decades have been a monumental disappointment: GDP per capita is still lagging behind West Germany by approximately 30 percent. The rate of growth remains constantly slow, especially in comparison with other post-communist countries. The rate of unemployment has been oscillating between 15 and 22 percent since 1995 etc. Thus a key question is: what are the main causes of such a long economic stagnation? The topical literature particularly deals with the following factors: too strong appreciation of the east currency (the so-called Ostmark), too high wage growth, problematic privatization and so on. However, from our point of view, the mistakes in economy policy in the early 1990s cannot explain such a long unsuccessful economic development. Besides, East Germany has an advanced and stable political, institutional and legal environment and is a part of an economically prosperous region. In our opinion, the incompatibility between West Germany formal institutions and East Germany informal institutions is another crucial cause of the long-lasting decline in the productive activities. After forty years of socialism, people in East Germany failed to behave according to the western rules. Moreover, we can see some social-psychological factors affecting specially East Germany. These factors (feelings of inferiority in relationship with West Germans, inadequately optimistic expectations) contributed to the consequent frustration and pessimism of East Germans that is reflected in low economic activity in East Germany.
ACCESSION #
86875890

 

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