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Reform from Below: Behavioral and Institutional Change in North Korea

Author

Listed:
  • Stephan Haggard

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

  • Marcus Noland

    () (Peterson Institute for International Economics)

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:iie:wpaper:wp09-8
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    References listed on IDEAS

    as
    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. Haggard, Stephan & Noland, Marcus, 2009. "Famine in North Korea Redux?," Journal of Asian Economics, Elsevier, vol. 20(4), pages 384-395, September.
    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.
    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, 2007. "North Korea's External Economic Relations," Working Paper Series WP07-7, 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. 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.
    8. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    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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    Cited by:

    1. Haggard, Stephan & Noland, Marcus, 2013. "Gender in Transition: The Case of North Korea," World Development, Elsevier, vol. 41(C), pages 51-66.
    2. Noland, Marcus & Haggard, Stephan, 2010. "Political attitudes under repression: evidence from North Korean refugees," MPRA Paper 21713, University Library of Munich, Germany.
    3. Stephan Haggard & Marcus Noland, 2010. "The Winter of Their Discontent: Pyongyang Attacks the Market," Policy Briefs PB10-1, Peterson Institute for International Economics.
    4. Haggard, Stephan & Lee, Jennifer & Noland, Marcus, 2012. "Integration in the absence of institutions: China–North Korea cross-border exchange," Journal of Asian Economics, Elsevier, vol. 23(2), pages 130-145.
    5. Katzeff Silberstein, Benjamin, 2010. "North Korea: Fading Totalitarianism in the "Hermit Kingdom"," Working Paper Series 836, Research Institute of Industrial Economics.
    6. Welter, Friederike & Smallbone, David, 2015. "Creative forces for entrepreneurship: The role of institutional change agents," Working Papers 01/15, Institut für Mittelstandsforschung (IfM) Bonn.
    7. Noland, Marcus & Haggard, Stephan, 2009. "Repression and punishment in North Korea: survey evidence of prison camp experiences," MPRA Paper 17705, University Library of Munich, Germany.

    More about this item

    Keywords

    failed states; transition; reform; North Korea; refugees;

    JEL classification:

    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • P3 - Economic Systems - - Socialist Institutions and Their Transitions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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