Every institutional system induces specific problems that have no standardized solutions for the people living in it. In this paper it is argued that people invest in relationships with certain others partly in order to solve these problems. Hence, the personal networks that result provide solutions to system-induced problems and they reflect the institutional environment. Personal networks of people living in the former German Democratic Republic (GDR) during communism are examined, and social capital theory is used to explain why communism did not produce social integration. In a communist society like that of the former GDR, weak ties are a liability, not an asset. Therefore, GDR citizens trusted only people whom they knew well. Since people in the former GDR were acutely aware of political control and the damage potential of weak ties, they invested only cautiously in others. They kept their distance from strangers and all others whose trustworthiness was uncertain and discussed politics only with people whom they truly trusted (the `niche'). Yet the shortages of the command economy forced people to rely on weak informal ties to secure necessary goods and services. Personal networks in East Germany had two specialized parts each kept separate from the other, a division of labor that vanished after the fall of the Wall. Our hypotheses are tested using multilevel models and triad analyses with data collected in 1992 and 1994 from two random samples in Leipzig and Dresden (n = 489). The first measurement focuses on the situation before the upheaval, the other the situation in 1994. Results show that during communism people indeed created `niches' consisting of dense, small networks of close relations with similar and trust-worthy others. Provision networks were maintained that were small, heterogeneous, and consisted of weak and uniplex ties. Furthermore, there was a relational `gap' between the niche and the provision network. These differences have gradually been vanishing since the fall of the Wall and with the political and economic unification of the former GDR and the former FRG.
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