The impact of a ready‐made state: East Germans in comparative perspective

To understand the impact of reunification upon Germans, we must make before and after comparisons across time, and also across central Europe. The first section shows that from the perspective of comparative Communist regimes, east Germans have been doubly advantaged, in former times because of belonging to a relatively prosperous part of the Soviet bloc and since reunification as subjects of a ‘ready‐made state’ with democracy and a wealthy social market economy. Analysis in the second section of the impact of reunification on west Germans shows that a significant proportion feel less satisfied than before, whereas the opposite is the case for east Germans. The third section introduces comparisons with Austria. Like the Federal Republic, it has enjoyed the advantages of democracy and a market economy, but without the trauma of division and reunification.     

Unemployment and crime: the role of apprehension

An increase in the unemployment rate decreases the opportunity cost of crime and increases the crime rate according to standard microeconomics models. However, a large body of empirical research has shown that an increase in unemployment may increase or decrease crime. By incorporating the return to crime into standard economic models, this paper shows that an increase in unemployment, as in recessions, decreases the opportunity cost of crime and the return to crime as well. As a result, the effect of unemployment on crime is ambiguous and depends on the apprehension rate. An increase in the unemployment rate tends to decrease the crime rate at lower apprehension rates, but to increase it at higher apprehension rates. An increase in the generosity of unemployment insurance benefits does not necessarily reduce the crime rate, and the effect of more generous unemployment insurance on crime depends again on the apprehension rate.