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The Winter of Their Discontent: Pyongyang Attacks the Market

Author

Listed:
  • Stephan Haggard

    (University of California, San Diego)

  • Marcus Noland

    (Peterson Institute for International Economics)

Abstract

North Korea's confiscatory currency reform and the subsequent ban on the use of foreign currencies are economically misguided policies and will result in the reduction of North Korean residents' welfare. These developments come at an inopportune time with the country facing economic stagnation, spiraling prices, and a resurgence of food shortages. North Korea has made no attempt to veil its motivations: strengthening the socialist economy by directly attacking the market and the independence from state control that it represents. Stephan Haggard and Marcus Noland posit that these policies will require a ratcheting up of already high levels of repression, and as long as the state lacks the resources and capacity to provide goods to its citizens, the effort is unlikely to significantly contribute to the stated goal of rebuilding socialism or eradicating the market. The open questions are whether the policies will be reversed and whether they have sown such discontent as to threaten political stability. The survival instincts of North Korea's determined, resilient citizens may very well make the market a locus of precisely the political activity the regime seeks to thwart.

Suggested Citation

  • Stephan Haggard & Marcus Noland, 2010. "The Winter of Their Discontent: Pyongyang Attacks the Market," Policy Briefs PB10-1, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb10-1
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    References listed on IDEAS

    as
    1. Noland, Marcus & Haggard, Stephan, 2007. "Famine in North Korea: Markets, Aid, and Reform," MPRA Paper 92548, University Library of Munich, Germany.
    2. Haggard, Stephan & Noland, Marcus, 2010. "Reform from below: Behavioral and institutional change in North Korea," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 133-152, February.
    3. 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.
    4. Marcus Noland, 2004. "Korea after Kim Jong-il," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa71, April.
    5. Haggard, Stephan & Noland, Marcus, 2009. "Famine in North Korea Redux?," Journal of Asian Economics, Elsevier, vol. 20(4), pages 384-395, September.
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    Citations

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    Cited by:

    1. Alexander Dukalskis, 2016. "North Korea’s Shadow Economy: A Force for Authoritarian Resilience or Corrosion?," Europe-Asia Studies, Taylor & Francis Journals, vol. 68(3), pages 487-507, March.
    2. Beers, David & de Leon-Manlagnit, Patrisha, 2019. "The BoC-BoE sovereign default database: what’s new in 2019?," Bank of England working papers 829, Bank of England.
    3. David Beers & Jean-Sébastien Nadeau, 2014. "Database of Sovereign Defaults, 2015 (Revised May 2015)," Technical Reports 101, Bank of Canada.
    4. Paul Hare, 2012. "North Korea: Building the Institutions to Raise Living Standards," International Economic Journal, Taylor & Francis Journals, vol. 26(3), pages 487-509, September.
    5. 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.
    6. Haggard, Stephan & Noland, Marcus, 2016. "Hard Target: Sanctions, Inducements, and the Case of North Korea," MPRA Paper 105812, University Library of Munich, Germany.
    7. Justin V. Hastings, 2015. "The economic geography of North Korean drug trafficking networks," Review of International Political Economy, Taylor & Francis Journals, vol. 22(1), pages 162-193, February.
    8. Beers, David & Mavalwalla, Jamshid, 2018. "The BoC-BoE sovereign default database revisited: what’s new in 2018?," Bank of England working papers 739, Bank of England.
    9. Anders Aslund, 2012. "Hyperinflations Are Rare, but a Breakup of the Euro Area Could Prompt One," Policy Briefs PB12-22, Peterson Institute for International Economics.
    10. Noland, Marcus & Haggard, Stephan, 2010. "Political attitudes under repression: evidence from North Korean refugees," MPRA Paper 21713, University Library of Munich, Germany.

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