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The (Non) Impact of UN Sanctions on North Korea

Author

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  • Marcus Noland

    (Peterson Institute for International Economics)

Abstract

This study finds that North Korea's nuclear test and the imposition of UN Security Council sanctions have had no perceptible effect on North Korea's trade with its two largest partners, China and South Korea. Before North Korea conducted an underground nuclear test, it was widely believed that such an event would have cataclysmic diplomatic ramifications. However, beginning with visual inspection of data and ending with time-series models, no evidence is found to support the notion that these events have had any effect on North Korea's trade with its two principal partners. In retrospect, North Korea may have calculated quite correctly that the direct penalties for establishing itself as a nuclear power would be modest (or, alternatively, put such a high value on demonstrating its nuclear capability that it outweighed the downside risks, however large). If sanctions are to deter behavior in the future, they will have to be much more enthusiastically implemented.

Suggested Citation

  • Marcus Noland, 2008. "The (Non) Impact of UN Sanctions on North Korea," Working Paper Series WP08-12, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp08-12
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    File URL: https://www.piie.com/publications/working-papers/non-impact-un-sanctions-north-korea
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    Citations

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    Cited by:

    1. Piotr Lukaszuk, 2021. "You can smuggle but you can't hide: Sanction evasion during the Ukraine crisis," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 71(01), pages 73-125, December.
    2. Patrick Maximilian Weber & Beata Stępień, 2020. "Conform or challenge? Adjustment strategies of sanction‐torn companies," The World Economy, Wiley Blackwell, vol. 43(11), pages 3006-3024, November.
    3. Habib, Benjamin, 2010. "Rogue proliferator? North Korea's nuclear fuel cycle & its relationship to regime perpetuation," Energy Policy, Elsevier, vol. 38(6), pages 2826-2834, June.
    4. Stephan Haggard & Marcus Noland, 2009. "The Political Economy of North Korea: Implications for Denuclearization and Proliferation," Economics Study Area Working Papers 104, East-West Center, Economics Study Area.
    5. Stephan Haggard & Marcus Noland, 2018. "Networks, Trust and Trade: The Microeconomics of China–North Korea Integration," Asian Economic Journal, East Asian Economic Association, vol. 32(3), pages 277-299, September.

    More about this item

    Keywords

    Sanctions; North Korea; Nuclear; United Nations; Trade equations;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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