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Reform from Below: Behavioral and Institutional Change in North Korea

  • Stephan Haggard

    ()

    (University of California, San Diego Graduate School of International Relations and Pacific Studies)

  • Marcus Noland

    ()

    (Peterson Institute for International Economics)

The state is often conceptualized as playing an enabling role in a country's economic development--providing public goods, such as the legal protection of property rights, while the political economy of reform is conceived in terms of bargaining over policy among elites or special interest groups. We document a case that 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 North Korean 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 some significant share of the population. There is strong evidence 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 overweights demographic groups with less favorable assessments of the regime, even counterfactually recalibrating the sample to match the underlying resident population suggests widespread dissatisfaction with the North Korean regime.

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Paper provided by Peterson Institute for International Economics in its series Working Paper Series with number WP09-8.

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Date of creation: Sep 2009
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Handle: RePEc:iie:wpaper:wp09-8
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  1. 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.
  2. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
  3. 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.
  4. Stephan Haggard & Marcus Noland, 2007. "North Korea’s External Economic Relations," Working Paper Series WP07-7, Peterson Institute for International Economics.
  5. Yoonok Chang & Stephan Haggard & Marcus Noland, 2008. "Exit Polls: Refugee Assessments of North Korea's Transition," Working Paper Series WP08-1, Peterson Institute for International Economics.
  6. 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.
  7. Stephan Haggard & Marcus Noland, 2008. "Famine in North Korea Redux?," Economics Study Area Working Papers 97, East-West Center, Economics Study Area.
  8. Marcus Noland, 2000. "Avoiding the Apocalypse: The Future of the Two Koreas," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 94.
  9. 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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