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Because authoritarian regimes like North Korea can impose the costs of sanctions on their citizens, they constitute “hard targets.” Yet such regimes may also be immune—and even hostile—to economic inducements if those inducements imply... more
Because authoritarian regimes like North Korea can impose the costs of sanctions on their citizens, they constitute “hard targets.” Yet such regimes may also be immune—and even hostile—to economic inducements if those inducements imply reform and opening. Can economic carrots and sticks by used effectively with respect to such systems? This book draws on an array of evidence—trade data, surveys of Chinese and South Korea firms doing business in North Korea, and an analysis of the country’s political structure—to capture the effects of sanctions and inducements. The book also provides a detailed reconstruction of the role of economic incentives in the bargaining over North Korea’s nuclear program. While it highlights the difficulties sanctions have faced, it also shows the reluctance of the leadership to weaken its grip on foreign economic activity, suggesting that inducements may have limited effect as well. The case is made through a detailed reconstruction of negotiations over North Korea’s nuclear program. Discussing parallels to Iran, the book urges policy makers to think in terms of gradual strategies—including informational ones—that may have effects only over the long run.
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Research Interests: Development Economics, Development Studies, Property Rights, Political Science, Politics, and 15 moreFailed States, Applied Economics, Reform, Language Change, Refugees, Public Good, Famine, Population, North Korean Economy, North Korea, Economic Reforms, North Korean defectors, North Korean Studies, P, and JEL codes
... Hills Karen Katen WM Keck II Michael Klein * Caio Koch-Weser Lee Kuan Yew * Reynold Levy Andrew N. Liveris Sergio Marchionne Donald F. McHenry Mario Monti Indra Nooyi Paul O'Neill David O'Reilly Hutham Olayan... more
... Hills Karen Katen WM Keck II Michael Klein * Caio Koch-Weser Lee Kuan Yew * Reynold Levy Andrew N. Liveris Sergio Marchionne Donald F. McHenry Mario Monti Indra Nooyi Paul O'Neill David O'Reilly Hutham Olayan Samuel J. Palmisano Frank H. Pearl Victor Pinchuk ...
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Research Interests: Critical Theory, Buddhism, Constitutional Law, Development Studies, Dispute Resolution, and 15 moreCorporate Governance, Developing Countries, Economic Development, Autonomy, Convergence, Competition, Broadcasting, Accountancy, Developing Country, Corruption, Bourgeoisie, Certainty, Business Risk, Administration of Justice, and Authoritarian Regime
This chapter draws on two unprecedented surveys of firms based in China and South Korea engaged in trade and investment with North Korea. It examines both the nature of cross-border exchange as well as the formal and informal institutions... more
This chapter draws on two unprecedented surveys of firms based in China and South Korea engaged in trade and investment with North Korea. It examines both the nature of cross-border exchange as well as the formal and informal institutions that underpin it and provides evidence of ongoing state control. Chinese firms in particular report that the business environment is highly corrupt; a consideration of dispute settlement and measures of trust suggest how the development of cross-border exchange is limited by the regime's overall economic strategy. South Korean firms operate in an enclave setting that imports South Korean property rights, and China my be moving to such a model over time. These findings cast doubt on the engagement model.
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... Hills Karen Katen WM Keck II Michael Klein * Caio Koch-Weser Lee Kuan Yew * Reynold Levy Andrew N. Liveris Sergio Marchionne Donald F. McHenry Mario Monti Indra Nooyi Paul O'Neill David O'Reilly Hutham Olayan... more
... Hills Karen Katen WM Keck II Michael Klein * Caio Koch-Weser Lee Kuan Yew * Reynold Levy Andrew N. Liveris Sergio Marchionne Donald F. McHenry Mario Monti Indra Nooyi Paul O'Neill David O'Reilly Hutham Olayan Samuel J. Palmisano Frank H. Pearl Victor Pinchuk ...
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This chapter considers characteristics of authoritarian regimes in general, and North Korea in particular, that affect their vulnerability to sanctions. These include the core constituents of the regime, its capacity to repress, and its... more
This chapter considers characteristics of authoritarian regimes in general, and North Korea in particular, that affect their vulnerability to sanctions. These include the core constituents of the regime, its capacity to repress, and its organizational structure. The chapter also includes a discussion of the path of reform and opening in North Korea, which is shown to be hesitant at best.
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ABSTRACT Despite its nuclear capability, in certain respects North Korea resembles a failed state sitting uneasily atop a shifting internal foundation. This instability is due in part to the devastating famine of the 1990s and the... more
ABSTRACT Despite its nuclear capability, in certain respects North Korea resembles a failed state sitting uneasily atop a shifting internal foundation. This instability is due in part to the devastating famine of the 1990s and the state's inability to fulfill the economic obligations that it had assumed, forcing institutions, enterprises, and households to cope with the ensuing challenges of maintaining stability with limited cooperation between the Korean government and the international community. The ineffective response to the humanitarian crisis triggered by the famine resulted in the outflow of perhaps tens of thousands of refugees whose narratives are largely overlooked in evaluating the efficacy of the humanitarian aid program. Witness to Transformation: Refugee Insights into North Korea uses extensive surveys with refugees who now reside in China or South Korea to provide extraordinary insight into the changing pathways to power, wealth, and status within North Korea. These refugee testimonies provide an invaluable interpretation of the regime, its motivations, and its capabilities and assess the situation on the ground with the rise of inequality, corruption, and disaffection in the decade since the famine. Through the lens of these surveys, preeminent North Korean experts Stephan Haggard and Marcus Noland carefully document the country's transition from a centrally planned economy to a highly distorted market economy, characterized by endemic corruption and widening inequality. The authors chart refugees' reactions to the current conditions and consider the disparity between the perceived and real benefit of the international humanitarian aid program experienced by this displaced population. Finally, the book examines these refugees' future prospects for integration into a new society.
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ABSTRACT It is well-known that the North Korea n economy has experienced a catastrophic decline over the past 20 years and will need massive foreign investment and aid if it is to shift onto a higher growth path. Economic assistance and... more
ABSTRACT It is well-known that the North Korea n economy has experienced a catastrophic decline over the past 20 years and will need massive foreign investment and aid if it is to shift onto a higher growth path. Economic assistance and expanded trade and investment have been promised in the multilateral setting of the Six-Party Talks , including North Korea’s ultimate entry into international financial institutions. China has also continued to extend substantial assistance to North Korea, and both trade and investment between China and the North have grown dramatically (Haggard and Noland 2008).
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Research Interests: Human Rights, Political Science, Politics, Discrimination, Language Change, and 15 moreRefugees, Social Science Research Network, North Korea (politics and society), Corruption, North Korea, Prison, North Korean defectors, North Korean human rights, Discretion, Prison Camps, P, K, JEL codes, Intimidation, and punishment psychology
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Theories of fiscal federalism explain the efficiency and other economic gains from decentralization but do not explain its extent and nature in practice. The authors develop a political theory of decentralization that focuses on the lines... more
Theories of fiscal federalism explain the efficiency and other economic gains from decentralization but do not explain its extent and nature in practice. The authors develop a political theory of decentralization that focuses on the lines of political accountability between politicians at different levels of government. The more accountable central-level politicians—presidents and legislators—are to subnational politicians, the greater the extent of decentralization and the more it will conform to the preferences of subnational politicians, for example, with respect to the degree of the center's discretion. The model is tested on five Latin American countries that, although formally decentralized, in fact exhibit wide differences in the distribution of spending and revenue responsibilities. The theory also helps explain a number of problems governments have encountered in decentralizing, including subnational debt crises and a mismatch between responsibilities and resources.
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Abstract Post-conflict governance poses particular challenges to governments and foreign assistance providers. We focus on the question of how���and whether���the rule of law is reconstituted in the wake of civil conflict. We find... more
Abstract Post-conflict governance poses particular challenges to governments and foreign assistance providers. We focus on the question of how���and whether���the rule of law is reconstituted in the wake of civil conflict. We find evidence that the state of the rule of law prior to and during a conflict substantially predicts the reconstitution of the rule of law post conflict. We further find that foreign intervention has a positive influence on the rule of law post conflict and that wars which end with a truth or settlement are associated with better ...
Research Interests: Law and Political Science
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ABSTRACT Many debates about engagement with North Korea hinge on the precise nature of North Korea's foreign economic relations: whether trade and investment are on commercial or non-commercial terms; the extent of illicit... more
ABSTRACT Many debates about engagement with North Korea hinge on the precise nature of North Korea's foreign economic relations: whether trade and investment are on commercial or non-commercial terms; the extent of illicit activities, and the changing geographic patterns of North Korea's trade. This article provides an effort to reconstruct North Korea's foreign economic relations, subordinating our estimates to the discipline of the balance of payments accounting framework. Among the most salient findings for the debate about engagement and sanctions is that North Korea's trade and investment have continued to increase despite the onset of the nuclear crisis and a decline in illicit activities. This growth has occurred in part because of the growing weight of China and South Korea in trade, aid, and investment. We also find that economic relations between North and South Korea have a substantially greater non-commercial component than those occurring across the China–North Korea border.
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The literature on the effects of globalization on social policy and welfare, and the parallel literature on the effects of democracy, operate in mutual isolation to a surprising degree. This article extends the debate on the welfare state... more
The literature on the effects of globalization on social policy and welfare, and the parallel literature on the effects of democracy, operate in mutual isolation to a surprising degree. This article extends the debate on the welfare state in the developing world by examining the social policy reactions of democratic and authoritarian governments to globalization. Using unbalanced panel data on 57 developing nations, and considering social security and health and education spending, the authors examine whether democratic and authoritarian regimes exhibit similar or different social spending priorities in the context of increasing economic openness. The results show that social spending in “hard” authoritarian regimes is more sensitive to the pressures of globalization than in democratic or intermediate regimes.
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Following North Korea's second nuclear test, the U.N. Security Council tightened sanctions. However, North Korea has tilted its relations toward partners uninterested in such measures. Since 2005, it has retreated from economic... more
Following North Korea's second nuclear test, the U.N. Security Council tightened sanctions. However, North Korea has tilted its relations toward partners uninterested in such measures. Since 2005, it has retreated from economic reform, most obviously in the 2009 confiscatory currency reform. These developments raise doubts about North Korea's interest in engagement.
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With the enormous expansion of scholarship on this subject, “rule of law” has come to mean different things—ranging from security and order to the operations of courts and the administration of justice. We review the various streams of... more
With the enormous expansion of scholarship on this subject, “rule of law” has come to mean different things—ranging from security and order to the operations of courts and the administration of justice. We review the various streams of theoretical and empirical research by academics and practitioners, emphasizing the connections to economic development. The core logic is that security of property rights and integrity of contract underpin, respectively, investment and trade, which in turn fuel economic growth and development. However, property rights and contracts rest on institutions, which themselves rest on coalitions of interests. Formal institutions are important, but, particularly in developing countries, informal institutional arrangements play a significant part as well. These considerations lead us to caution against an exaggerated confidence in the ability of development assistance to implant new institutions for the rule of law.