ABSTRACT
This chapter analyses the effects of unification on rural restructuring. It describes major structural and institutional changes. The chapter draws the limitations of institutional transfers to Central and Eastern Europe, for instance within the context of the enlargement of the European Union. It argues that rural life under socialism was shaped by a paternalistic industrial system and public mobilisation through politics, but also by a second layer of informal networks and privacy. Industrialisation in rural areas included two strategies – the establishment of industrial production, and the industrialisation of agriculture. Integration into the European Market was accompanied by an industrial and agricultural decline, which wiped out most of the industrial firms within a few years or forced them to reduce their activities to a much smaller scale. The fundamental difference is the historical farm structure, which also influenced the industrial history. The central objective of institutional reform was the functional differentiation of economic, policy and voluntary sector institutions.
