Welcome Comrades! Political and Economic Effects of Foreign Military Bases

• In Event: Economic Instruments of Foreign Policy

Abstract

States have historically deployed military forces on foreign soil to expand and sustain their sphere of influence. While their security implications are well documented, we still know little about how these forces affect the local communities that host them. This study analyses the political and economic effects of foreign military bases on their surrounding local communities by focusing on the insightful case of Soviet military bases in East Germany. These bases hosted over 500.000 troops in over 100 locations and became the source of economic and cultural spillovers. However, following the departure of all troops by 1994, these local communities faced substantial decline, with most former bases lying abandoned and unused. In this paper, I use a spatial difference-in-differences and instrumental variable design to study the political and economic effects of Soviet military bases pre- and post-unification. I show that proximity to Soviet bases boosted local production and material well-being during the time of communism, while the absence of Soviet troops notably increased support for East Germany's communist successor party throughout all following Federal Elections. The proposed underlying mechanism of "red nostalgia" is corroborated by evidence that areas of former bases hosted more pro-Russian protests since the war in Ukraine. These findings offer a new perspective on the impact of foreign military bases on local communities, highlighting their role in the local economy and providing crucial insights for contemporary military exit strategies.

Author

• Ludwig Schulze, European University Institute