Economic Efficiency and Political Constraints - The Dilemma of Privatization in Eastern Germany

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The paper analyzes the economic structure of the former East Germany, highlighting its centralized socialist economy where state-owned enterprises dominated, comprising over 80% of total assets. It contrasts this with West Germany, noting the concentration of employment in declining sectors like agriculture and manufacturing, which employed nearly half the workforce. The underdevelopment of the service and trade sectors in East Germany is also emphasized, illustrating significant disparities between the two economies prior to reunification.