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The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany

Andreas Lichter, Max Löffler and Sebastian Siegloch ()
Authors registered in the RePEc Author Service: Max Löffler

No 6042, CESifo Working Paper Series from CESifo Group Munich

Abstract: Despite the prevalence of government surveillance systems around the world, causal evidence on their social and economic consequences is lacking. Using county-level variation in the number of Stasi informers within Socialist East Germany during the 1980s and accounting for potential endogeneity, we show that more intense regional surveillance led to lower levels of trust and reduced social activity in post-reunification Germany. We also find substantial and long-lasting economic effects of Stasi spying, resulting in lower self-employment, higher unemployment and larger out-migration throughout the 1990s and 2000s. We further show that these effects are due to surveillance and not alternative mechanisms. We argue that our findings have important implications for contemporary surveillance systems.

Keywords: government surveillance; trust; social ties; East Germany (search for similar items in EconPapers)
JEL-codes: H11 N34 N44 P20 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany (2016) Downloads
Working Paper: The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany (2016) Downloads
Working Paper: The Economic Costs of Mass Surveillance: Insights from Stasi Spying in East Germany (2015) Downloads
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