The "Colonization" of East Germany?: A Comparative Analysis of German Privatization

Abstract

1. At the beginning of the 1990’s at least 83 countries were undergoing some form of privatization. See Anna Gelpern & Malcolm Harrison, Ideology, Practice, and Performance in Privatization: A Case Study of Argentina, 33 HARV. INT’L L.J. 240, 240 (1992); see also Mary M. Shirley, Privatization and Performance, 17 HASTINGS INT’L & COMP. L. REV. 669, 671–73 (1994) (describing the great increase in privatizations in the 1990’s). In this Note, privatization refers to the transfer of state-owned enterprises into the private sector. 2. See, e.g., CHRISTOPHER ADAM ET AL., ADJUSTING PRIVATIZATION: CASE STUDIES FROM DEVELOPING COUNTRIES 116–117, 163 (1992) (noting that improving efficiency and stimulating development have been the goals of privatization in Jamaica and Sri Lanka); Shirley, supra note 1, at 672 (citing the wish to make a country’s economy and citizens “better off” as the major reason for privatizing); Mary M. Shirley, The What, Why, and How of Privatization: A World Bank Perspective, 60 FORDHAM L. REV. S23, S25–27 (1992) (setting forth enhanced efficiency and improved use of public resources as reasons for privatizing). 3. Throughout this Note, the terms “East Germany” and “East Germans” are used to refer to the territory and citizens of the former German Democratic Republic both before and after reunification. 4. See, e.g., James H. Freis, Jr., An Outsider’s Look into the Regulation of Insider Trading in Germany: A Guide to Securities, Banking and Market Reform in Finanzplan Deutschland, 19 B.C. INT’L & COMP. L. REV. 1, 8 (1996) (stating that post-unification Germany has reasserted itself as an economic power); Alexander Reus, Eastern Germany Report: Investment Incentives in the New Lander, 4 U. MIAMI BUS. L.J. 1, 2–3, 6–7 (1994) (noting that the former German Democratic Republic’s climate, market size, central position within Europe, and privatization incentive programs have indeed resulted in “high investment levels in Eastern Germany”); Edward Mortimer, The Ballot Box Is Here to Stay, FIN. TIMES, Dec. 23, 1995, available in 1995 WL 1167853, at *7 (“German unity can already be proclaimed an irreversible success.”); Privatizations Are Deemed Success in Eastern Germany, WALL ST. J. EUROPE, May 25, 1993, available in 1993 WL-WSJE 2038759, at *1 (reporting view that most East German companies were privatized successfully); John Hall Udo Ludwig, East Germany’s Transitional Economy, CHALLENGE, Sept.