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More effective defense capabilities and pareto-improving resource transfers: Conflict on the Korean Peninsula

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  • Noh, Suk Jae

Abstract

Analyzing the resource allocation between productive and appropriative activities in a conflict between prey and predator, this paper demonstrates the possibility of Pareto-improving economic assistance from South Korea to North Korea, even when augmented resources are used by North Korea to build up more offensive weapons, if resource transfer is coupled with the enhanced security position of South Korea. Some combinations of resource transfer (carrot) and increased effectiveness of defense (stick) increase production efficiency by decreasing the total amount of appropriative activities in a conflict. These combinations of stick and carrot can in some cases change the behavior of North Korea from that of a pure predator to that of a part-time predator. These results shed some light on policy debates in South Korea's dealings with North Korea.

Suggested Citation

  • Noh, Suk Jae, 2018. "More effective defense capabilities and pareto-improving resource transfers: Conflict on the Korean Peninsula," European Journal of Political Economy, Elsevier, vol. 55(C), pages 1-13.
    • Handle: RePEc:eee:poleco:v:55:y:2018:i:c:p:1-13
    DOI: 10.1016/j.ejpoleco.2017.09.003
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    References listed on IDEAS

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    More about this item

    Keywords

    Resource transfers; Effectiveness of defense; Production efficiency; Korean Peninsula;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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