Fueling the Oder-Neiße Divide: Energy Restructuring and Social Redistribution in East Germany and Poland

Theocharis N. Grigoriadis, University of California - Berkeley

Abstract

This paper analyzes the politics of energy restructuring in East Germany and Poland. Its purpose is two-fold: on the one hand, it provides analytical dichotomies between regulatory vs. procedural and horizontal vs. hierarchical restructuring to explain the different paths in the liberal transformation of the energy industry in East Germany and Poland. The substitution of a central and legitimate government by Treuhand in the East German case as well as the central coordinating role of the government in the Polish case constitute the key indicators for these conceptual distinctions. On the other hand, post-socialist energy firms are treated as social redistribution mechanisms, whose restructuring is defined by the existence of an equity constraint. Contrary to Treuhand, which functioned as an institutional sponsor for an ethnically-driven transfer of the East German energy sector to a set of subsidiaries of West German corporations, the Polish Ministry of Privatization preferred to adopt the equity constraint rather than regulate its energy policy preferences through the private sector. The interaction of energy restructuring with social redistribution is presented in the form of a two by two matrix with four different policy outcomes. Private organizations or semi-legitimate public agencies captured by corporate interests are not able to apply the equity constraint as an inseparable redistributive component of energy restructuring as the central government can.