Abstract
We investigate the long-run effects of government surveillance on civic capital and economic performance, studying the case of the Stasi in East Germany. Exploiting regional variation in the number of spies and administrative features of the system, we combine a border discontinuity design with an instrumental variable strategy to estimate the long-term, post-reunification effect of government surveillance. We find that a higher spying density led to persistently lower levels of interpersonal and institutional trust in post-reunification Germany. We also find substantial and long-lasting economic effects of Stasi surveillance, resulting in lower income, higher exposure to unemployment, and lower self-employment.
Original language | English |
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Article number | jvaa009 |
Pages (from-to) | 741–789 |
Number of pages | 49 |
Journal | Journal of the European Economic Association |
Volume | 19 |
Issue number | 2 |
Early online date | 21 Apr 2020 |
DOIs | |
Publication status | Published - 17 Apr 2021 |
JEL classifications
- n34 - Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Europe: 1913-
- n44 - Economic History: Government, War, Law, International Relations, and Regulation: Europe: 1913-
- p20 - Socialist Systems and Transitional Economies: General
- h11 - Structure, Scope, and Performance of Government
Keywords
- government surveillance
- trust
- social ties
- East Germany
- ORIGINS
- REPRESSION
- STATE
- RISK
- CULTURE
- TRUST
- PSYCHOLOGY
Datasets
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Replication Files for: The Long-Term Costs of Government Surveillance – Insights from Stasi Spying in East Germany
Lichter, A. (Creator), Löffler, M. (Creator) & Siegloch, S. (Creator), Harvard Dataverse, 24 Jan 2020
DOI: 10.7910/DVN/WMVC4U, https://doi.org/10.7910%2Fdvn%2Fwmvc4u
Dataset/Software: Dataset