Efficacy of Economic Sanctions against North Korea: Evidence from Satellite Nighttime Lights

The United Nations Security Council adopted eight resolutions from 2012 to 2019, in condemning threatening actions on the part of North Korea, such as conducting ballistic missiles and nuclear weapons tests. I examine the efficacy of sanctions against North Korea using satellite nighttime lights data. The political system of North Korea is defined as suryong dictatorship, in which the dictator (supreme leader or suryong) holds absolute power to dictate the country’s resources. Suryong allocates large enough fraction of the country’s resources to the selectorate for supporting his political power. I empirically test the theoretical hypothesis - the ruler will transfer a greater fraction of the country’s resources to the selectorate as sanctions intensify - using satellite nighttime lights data. I find that an additional sanction is associated with an increase in the difference in nighttime lights between the capital city, Pyongyang, and the rest of the country by about 0.4 percent. Manufacturing cities, mining areas, the Chinese border region, and Sinuiju become relatively brighter with an additional sanctions event. Another notable finding is the estimate on the interaction term with the nuclear development facilities areas, which suggests that the ruler diverts resources and electricity from nuclear development activities to other sectors when sanctions increase.