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Reform from below: Behavioral and institutional change in North Korea

  • Haggard, Stephan
  • Noland, Marcus

The state is often conceptualized as playing an enabling role for economic development, providing public goods, such as the legal protection of property rights, with the political economy of reform conceived in terms of bargaining among elites or special interest groups. We document a case which turns this perspective on its head: efficiency-enhancing institutional and behavioral changes arising, not out of a conscious, top-down program of reform, but rather as unintended (and in some respects, unwanted) by-products of state failure. Responses from a survey of North Korean refugees demonstrate that the economy marketized in response to state failure with the onset of famine in the 1990s and subsequent reforms and retrenchments appear to have had remarkably little impact on at least some significant share of the population. There is strong evidence, however, of powerful social changes, including increasing inequality, corruption, and changed attitudes about the most effective pathways to higher social status and income. These assessments appear to be remarkably uniform across demographic groups. While the survey sample marginally over-weights demographic groups with less favorable assessments of the regime, even counterfactually re-calibrating the sample to match the underlying resident population suggests widespread dissatisfaction with the North Korean regime.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 73 (2010)
Issue (Month): 2 (February)
Pages: 133-152

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Handle: RePEc:eee:jeborg:v:73:y:2010:i:2:p:133-152
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  1. 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.
  2. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-88, December.
  3. Marcus Noland, 2000. "Avoiding the Apocalypse: The Future of the Two Koreas," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 94, May.
  4. Powell, Benjamin & Ford, Ryan & Nowrasteh, Alex, 2008. "Somalia after state collapse: Chaos or improvement?," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 657-670, September.
  5. Stephan Haggard & Marcus Noland, 2008. "Famine in North Korea Redux?," Working Paper Series WP08-9, Peterson Institute for International Economics.
  6. Chang, Yoonok & Haggard, Stephan & Noland, Marcus, 2009. "Exit polls: Refugee assessments of North Korea's transition," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 144-150, March.
  7. Stephan Haggard & Marcus Noland, 2007. "North Korea’s External Economic Relations," Working Paper Series WP07-7, Peterson Institute for International Economics.
  8. Yoonok Chang & Stephan Haggard & Marcus Noland, 2008. "Migration Experiences of North Korean Refugees: Survey Evidence from China," Working Paper Series WP08-4, Peterson Institute for International Economics.
  9. Leeson, Peter T., 2007. "Better off stateless: Somalia before and after government collapse," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 689-710, December.
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