Tuesday, 11 November 2014

Graph of the week: A country divided

This weekend Germans celebrated the 25th anniversary of the fall of the Berlin Wall. A symbolic event that represented the end of an era (both the Cold War and communism in Eastern Europe were finally over); followed by a stream of euphoria and triumphalism from all sides. Looking back, 25 years later, some might say that the euphoria was misplaced: the world yet again resembles a Cold War status quo, where old foes are once again flexing their muscles in foreign territories. On the economic side, some Eastern European countries are arguably better off than before, while others remain in shambles of a failed transition. 

In Germany, at first sight the convergence wasn't as successful as initially hoped. 25 years later the western Germans are still living better than their eastern compatriots. GDP p/c in east Germany is still 2/3 of that in the west, unemployment is higher, its demographics is worse, and net migration is still positive from east to west, leaving many eastern rural areas scarcely populated. Looking at the images below, the eastern part of Germany suffers from the same 'illnesses' as all former communist countries (particularly those of a failed transition). This once again shows, more clearly than anything else, a natural experiment of history where one nation with the same history, culture and climate, divided by two different institutional system, generated two very different outcomes: one is prosperous and happy, the other (in relative terms) poor and miserable. 

Source: Washington Post
But let's not be too harsh. This divide in Germany isn't all that different than the north-south divide in Italy, Britain (where the south is better off), or the US. In socio-economic terms particularly. Every nation has within-country regional inequalities, where one part of the country is worse off (better off) than its most (least) successful region. In Germany the most successful region is probably Bavaria, so in comparison east Germany looks particularly bad. But that is no different than e.g. Lombardia vs Calabria in Italy, or South East and the Greater London area vs Yorkshire and North East in Britain. In each case the richest region is twice as rich as the poorest. In Germany however the divide carries an unavoidable cultural paradigm as well. 

For example consider the following two maps:


On the right side we have the share of foreigners in the total population, while on the other the relative success of the extremist NPD (Nazi) party. (I already discussed the electoral divisions along the Berlin Wall in the city, where the eastern part of the city voted highly in favor of the socialist party - not the social democratic SPD, but the successor of the former socialist party that ruled DDR - while the west of Berlin overwhelmingly supported Merkel's CDU). Anyway what is most interesting here is how the extremists (obviously highly opposing immigration) win in areas where there are very few foreigners to begin with! Perhaps in one way it makes sense - they fear that what they don't know. But I'll leave that discussion for another time. 

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