There is much literature stressing border persistence. Especially research focusing on economic, political and social legacies of the pre-WWI empires in their successor states has gained momentum in the past decade, and there is numerous evidence for persistence of differences once a border is removed. What influence, however, will imposition of a border and, respectively, different cultural and institutional systems have on a homogeneous region?
This lecture explores the economic effects of the breakup of East Prussia into what is today Poland, Russia and Lithuania. Rather than concentrating on the long-run effects of historical borders, Maria Polugodina explores the effects of dissolution of imperial regions into the boundaries of modern states. We expect that German imperial legacies in the form of advanced human capital, interethnic tolerance and conservative political preferences persist in the territories of former East Prussia in Poland, Russia and Lithuania, compared to neighboring regions in their respective countries. Hence, we identify long-run tradeoffs between national identity and regional development drawing evidence from institutional data in East-Central Europe.