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The Nature and Direction of Economic Reform in North Korea

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  • Sujian Guo
  • Gary A. Stradiotto

Abstract

In this article we critically examine the nature and direction of economic reform in North Korea. While North Korea began to experiment with reforms and a partial open‐door policy in the mid‐1980s, the most substantial attempt at economic restructuring occurred in July 2002. In these latest reforms, the government attempted to change the planned economic system through the introduction of price reforms, market and commodity relations, profit motivation and material incentives. However, scholars disagree on the nature and direction of economic restructuring. In order to analyze the state of economic transformation, we develop a conceptual framework of market socialism with a set of empirical indicators against which we examine the trends, direction and limitations of reforms. Our study strongly suggests that North Korea is moving away from the command economy towards a model of market socialism as practiced in China and Vietnam.

Suggested Citation

  • Sujian Guo & Gary A. Stradiotto, 2007. "The Nature and Direction of Economic Reform in North Korea," Political Studies, Political Studies Association, vol. 55(4), pages 754-778, December.
    • Handle: RePEc:bla:polstu:v:55:y:2007:i:4:p:754-778
    DOI: 10.1111/j.1467-9248.2007.00663.x
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    References listed on IDEAS

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    1. McMillan, John & Naughton, Barry, 1992. "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 8(1), pages 130-143, Spring.
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    3. Marcus Noland, 2004. "Famine and Reform in North Korea," Asian Economic Papers, MIT Press, vol. 3(2), pages 1-40.
    4. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "Patterns of Transition from Plan to Market," The World Bank Economic Review, World Bank, vol. 10(3), pages 397-424, September.
    5. Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers 94-01, California Davis - Institute of Governmental Affairs.
    6. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766, Decembrie.
    7. Stanley Fischer & Alan Gelb, 1991. "The Process of Socialist Economic Transformation," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 91-105, Fall.
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    Cited by:

    1. Dan-Bi Um & Jung-Sup Um, 2017. "Informed consent utilizing satellite imagery in forestry carbon trading with North Korea," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(4), pages 531-552, August.
    2. Um, Dan-Bi, 2020. "Configuring land tenure caused by fixed residence according to the societal control system of North Korea: Focus on forestry carbon trading," Land Use Policy, Elsevier, vol. 96(C).

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