When East Meets West: Interpersonal Contact and the Demand for Democracy ∗ Andreas Stegmann briq Institute November 25, 2019 Abstract What is the role of interpersonal contact in shaping beliefs, attitudes and behaviors in non-democratic societies? This paper investigates the causal effects of a policy that facilitated private visits from West Germany to Communist East Germany. I provide evidence that treated East German districts experienced more protest and weaker support for the Communist party during the democratic transition. Treated individuals displayed beliefs and attitudes less aligned with the ones promoted by the regime. The results suggest that interpersonal contact is a powerful way to change these objects within non-democratic regimes, and that these changes can affect how democratic transitions unfold. JEL Classification: D83, F55, N44, P26 ∗Andreas Stegmann: [email protected]. I am indebted to my advisor Monica Martinez-Bravo for her encouragement and guidance throughout this project. I would also like to thank Manuel Arellano and Diego Puga for their advice and support. I am also grateful to Daron Acemoglu, Tincho Almuzara, Sam Bazzi, Paula Bustos, Bruno Caprettini, Mitch Downey, Frederico Finan, Julio Galvez, Camilo Garcia- Jimeno, Ben Marx, Pedro Mira, Joan Monras, Ben Olken, Torsten Persson, Chris Roth, Michel Serafinelli, Mahvish Shaukat, Joachim Voth, and seminar participants at CEMFI's PhD workshop, SSDEV2018, the 2018 European Winter Meeting of the Econometric Society, McGill University, University of Notre Dame, Northwestern University Kellogg School of Management, Stanford GSB, University of Edinburgh, Collegio Carlo Alberto, University of Mannheim, Toulouse School of Economics, IIES, University of Warwick, the Barcelona Summer Forum 2019 and EEA-ESEM 2019 for helpful comments and suggestions. I gratefully acknowledge financial support from the Maria de Maeztu grant. Early stages of this research were undertaken during my stay at the Department of Economics at MIT, and I sincerely thank them for their hospitality. 1 1 Introduction Non-democratic regimes often limit citizens' access to outside information. The extent to which such information becomes available in non-democratic societies can depend on the nature of interactions between a non-democratic regime and foreign, democratically gov- erned countries. In particular, democratic governments can pursue two approaches that substantially differ in the potential implications for the information sets of citizens within non-democratically governed societies. They can either promote engagement { for instance, by fostering collaboration and exchange { or prevent it, by imposing sanctions and travel bans. The consequences of either of these two strategies are largely unclear. Changes in the information environment resulting from higher or lower levels of engagement may have im- portant implications for the formation of beliefs and attitudes that underlie political behav- ior. However, the empirical evidence on factors that shape those objects in non-democratic regimes, as well as on the long-term consequences of changes to these objects for outcomes during democratic transitions remains scarce. To address these issues, I investigate a policy that was implemented during the Commu- nist dictatorship in East Germany and that, as I document, affected the beliefs and attitudes of individuals living under the regime.1 In 1972, the East German leadership agreed to reduce restrictions on West Germans travelling to East Germany with the purpose of visiting family and friends. Historians have argued that this program \[...] ranks among the most lasting factors destabilizing and delegitimizing the [East German] dictatorship."2 (Kowalczuk, 2009, p. 185) To identify the effects of this policy, I exploit exogenous variation in the level of effective 1The empirical context only allows to identify the effects of beliefs, preferences and attitudes jointly. When introducing the outcome measures below, I explicitly highlight which concept is more suitable for the interpretation of a given measure. However, to ease the exposition, I refer to the bundle of beliefs, preferences and attitudes as beliefs throughout the remainder of this paper. 2In particular, contact between individuals living in different political systems could affect beliefs about both the domestic and the foreign political and economic system within a non-democratic society. The notion that exposure to a set of ideas through interpersonal contact may be effective in changing individuals' beliefs, and possibly more effective than other forms of communication such as media reporting, is consistent with Allport's (1954) contact hypothesis. Paluck, Green and Green (2018) provide a recent meta-analysis of the empirical evidence on this hypothesis in social psychology. They conclude that, while contact typically affects beliefs and attitudes, \given the narrow scope and mixed findings of the policy-relevant contact literature, [. ] the jury is still out regarding the contact hypothesis and its efficacy as a policy tool." In economics, two examples of leading studies on contact are Rao (2019) and Lowe (2019). Rao (2019) shows that integrating poor and rich students positively affects the pro-social behavior of rich students within the context of schools in Delhi. Lowe (2019) investigates the effects of different types of contact using randomized variation in interactions experienced by members of different castes over the course of a series of cricket tournaments. My paper contributes to this literature by studying inter-group contact in a different dimension: interactions between individuals that live in different political and economic systems. 1 travel restrictions across East German districts. A subset of districts located close to West Germany were granted simplified procedures that facilitated visits from West Germany. I refer to these simplified procedures as the extended visitors program throughout the paper. I leverage this cross-sectional variation in a semi-parametric spatial regression discontinuity (RD) design that relies on a comparison between districts that fell just within the area subject to the extended visitors program and those that were located just outside of the program boundary.3 To evaluate the effects of the extended visitors program, I assembled a comprehensive dataset containing measures of beliefs within the East German population, protest inci- dences, electoral outcomes during democratic transition, as well as the number of West visitors received. First, I show that the extended visitors program was effective in increasing visits from the West. Districts that were part of the extended visitors program had between 9.8 and 18.9% more visitors in a year than those districts nearby that were not part of the program. A simple back-of-the-envelope calculation implies that the extended visitors program increased the chance for an East German citizen to receive a West German visitor by 12 percentage points, more than a 50% increase relative to the control mean. Second, I examine the effect on support for East Germany's non-democratic regime using several measures of political behavior. I estimate that the assignment to the extended visitors program increased the number of protest days during the East German revolution in 1989 by 31 to 34.5% on average. These protests were critical for overthrowing the East German regime and setting off the transition to democracy (Dale, 2005). I also investigate electoral support during the democratic transition in March 1990. Assignment to the extended visitors program lowered the vote share obtained by the legal successor party of the formerly ruling Communist party by 1.1 to 1.4 percentage points, a decline of 9.2 to 12.2% compared to the sample mean.4 This effect persisted for almost a decade after the East German revolution. These results suggest that visits by West Germans weakened support for the East German regime. During these visits, East and West Germans were able to exchange views on their respective political and economic systems as well as the accompanying societal norms. Direct exposure to West Germans' points of view could have been particularly effective in conveying 3Figure1 provides a visual representation of the district-level assignment to the extended visitors program and highlights (in red) the discontinuity within East Germany (depicted in shades of blue). Thick dark lines demarcate administrative regions. The baseline empirical analysis exploits variation within these regions. 4I follow DellaVigna and Gentzkow (2010) and estimate a persuasion rate of approximately 27.5%. This is the estimated share of the population that changed their voting behavior to not supporting the Communist party among those that were exposed to these visits and did not reject the Communist party already. I describe the assumptions made to derive this estimate in section 15 of the Online Appendix. For comparison, the estimates reported in DellaVigna and Gentzkow (2010) range from 0.7% to 29.7%. 2 information about the West German political and economic system. These interactions could thus have been instrumental in shaping individuals' beliefs about the Communist dictatorship and East German society in general. To examine potential effects on the beliefs of East Germans, I use individual-level data from the German Socio-Economic Panel (G-SOEP) measured at the time of the democratic transition. This survey elicits individuals' beliefs about which types of behavior are