Why has North Korea not collapsed yet?

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North Korea’s downfall has been predicted time and time again, yet here we are, in the year 2013, and not much has changed in this regard. After the collapse of the Soviet Union and North Korea’s economic collapse in the early/mid 1990s, the end seemed more inevitable than ever. However, the political collapse did not follow suit and around 20 years have passed since then. This article therefore attempts to explain why the inevitable may not be so inevitable after all.

1) Incentives

Virtually every economist will tell you that “incentives matter”. And they do—perhaps even more so in North Korea. Despite not having served in the military, Kim Jong-un has recently been promoted to a four star general. Under normal circumstances, this would cause outrage among the military elites and established party cadres. However, since Seon-gun (Military First Policy) has been fully constitutionalized in April 2009, military officials enjoy priority access to virtually anything – without having to politically justify those actions. As such, they have little incentive to change the status quo. Similar arguments can be made about the privileged citizens of Pyongyang. They will lose the most from political dissent, as they risk being banished from the city for even minor offences. This is especially critical with respect to the next point, space.

2) Space

Space is very important in order to organize and coordinate. North Koreans lack space – private, public, and virtual. The last has been crucial in triggering the still ongoing Arab Spring but is almost entirely absent in North Korea. More importantly, it is not legal for more than three North Koreans to freely gather, making organized dissent all the more difficult. Given these circumstances, coordinated actions are most likely to happen in densely populated areas, i.e. cities. This stands in stark contrast to the previous point about urban residents mostly consisting of privileged classes, and may provide a potential explanation as to why this has not happened yet. Furthermore, markets also provide space because information, gossip, prices, etc. are all exchanged there. Despite not fitting into the socialist system, this is a major (if not the major) reason why the North Korean government is trying to suppress their development.  

3) Uncoordinated international actions

The North Korean government has rarely felt truly isolated, because it was able to play one party against another due to uncoordinated actions by the countries of interest, such as ROK, U.S., etc. Especially American and South Korean government policies toward North Korea need to be more coordinated. The Bush Doctrine took a very conservative stand and famously labeled North Korea as an “axis of evil” country. At the same time, however, the South Korean government adopted a more liberal and inclusive approach, sunshine policy. During the Lee Myung-bak, who would have been more willing to take a hard-lined stance against the DPRK, administration, U.S. was already embroiled in a messy situation with Afghanistan and Iraq, causing it to divert its attention from the hermit kingdom. Given this recent track record, the current Obama-Park administrations seem to be more in sync, providing a much-needed change. If China can be included in this coordination process, North Korea may not be able to continue playing one party against the other. 

The reasons above are of course not the sole determinants in explaining the current situation; there are other various factors in play. However, they can provide potential reasons and, being an economist, I personally do believe that incentives as well as space matter and therefore need to be properly addressed and understood in order work toward unification.


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