The Winter of Their Discontent: Pyongyang Attacks the Market
North Korea's confiscatory currency reform and the subsequent ban on the use of foreign currencies are economically misguided policies and will result in the reduction of North Korean residents' welfare. These developments come at an inopportune time with the country facing economic stagnation, spiraling prices, and a resurgence of food shortages. North Korea has made no attempt to veil its motivations: strengthening the socialist economy by directly attacking the market and the independence from state control that it represents. Stephan Haggard and Marcus Noland posit that these policies will require a ratcheting up of already high levels of repression, and as long as the state lacks the resources and capacity to provide goods to its citizens, the effort is unlikely to significantly contribute to the stated goal of rebuilding socialism or eradicating the market. The open questions are whether the policies will be reversed and whether they have sown such discontent as to threaten political stability. The survival instincts of North Korea's determined, resilient citizens may very well make the market a locus of precisely the political activity the regime seeks to thwart.
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- Haggard, Stephan & Noland, Marcus, 2010.
"Reform from below: Behavioral and institutional change in North Korea,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 73(2), pages 133-152, February.
- Stephan Haggard & Marcus Noland, 2009. "Reform from Below: Behavioral and Institutional Change in North Korea," Working Paper Series WP09-8, Peterson Institute for International Economics.
- Marcus Noland, 2004. "Korea after Kim Jong-il," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa71, February.
- Marcus Noland, 2004. "Korea after Kim Jong-il," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa71, November.
- Haggard, Stephan & Noland, Marcus, 2009. "Famine in North Korea Redux?," Journal of Asian Economics, Elsevier, vol. 20(4), pages 384-395, September.
- Stephan Haggard & Marcus Noland, 2008. "Famine in North Korea Redux?," Economics Study Area Working Papers 97, East-West Center, Economics Study Area.
- Stephan Haggard & Marcus Noland, 2008. "Famine in North Korea Redux?," Working Paper Series WP08-9, Peterson Institute for International Economics.