Marcus Noland

Why North Korea Will Muddle Through

After consulting with their superiors, the guards at Rajin har bor allowed us to exit. Apparently two Americans on a morning jog were not thought to pose a grave threat to national security. As we ran up the hill overlooking the harbor, I noticed a small military installa tion. On our way down I watched two soldiers stealthily working their way through the dilapidated structures, eventually reaching an isolated corner of the base, far from their comrades. Like two characters from a B movie, the soldiers looked left and right before kneeling. One removed his knapsack and placed it between them in the dirt. He opened it and withdrew two . . . Bananas. At that moment his colleague glanced upward and spied us on the ridge above. The soldiers leaped to their feet and turned their bodies to shield the bananas from our view. The presumably banana-laden knapsack was stashed at the base of a wall, and, checking that they otherwise had not been observed, the soldiers headed back toward the center of the base.

Religion, Culture, and Economic Performance

The hypothesis that the coefficients on variables of religious affiliation are jointly equal to zero can frequently be rejected at conventional levels of statistical significance (i.e., religion matters), but no robust relationship between adherence to major world religions and national economic performance is uncovered, using both cross-national and subnational data. The results with respect to Islam do not support the notion that it is inimical to growth. On the contrary, every statistically significant coefficient on Muslim population shares reported in this paper - in both cross-country and within-country statistical analyses - is positive. If anything, Islam promotes growth.

The changing comparative advantage of Japan and the United States

Abstract This paper examines the changing comparative advantage of Japan and the United States in manufactured goods. The structure of comparative advantage across 167 manufactured product categories in the two countries is estimated econometrically as a function of interindustry differences in factor intensities. During the period 1967–1983 Japans pattern of specialization in manufactures is found to have changed dramatically with Japan shifting from specialization in unskilled labor intensive goods to human capital and research and development intensive products. The United States maintained its specialization in physical capital, human capital, and research and development intensive goods. Finally, changes in the pattern of trade in high technology products in each of the two countries are analyzed, and the implications of these results for future patterns of specialization are indicated.

Has Asian export performance been unique

Abstract It is often argued that technological spillovers or other externalities associated with exports or trade are sector-specific, yet trade and growth linkages are typically examined at the level of macroeconomic aggregates. This paper extends the analysis another level of specificity, analyzing the commodity composition of trade. This paper addresses three interrelated sets of questions. First, have Asian countries exhibited unusually high exports in particular industries? Has their commodity composition of exports been unusually concentrated? Second, has specialization in particular sectors emerged unusually rapidly the case of Asian countries? Third, can export similarity across Asian countries be explained by economic fundamentals?

Famine in North Korea Redux

In the 1990s, 600,000 to 1 million North Koreans, or about 3-5 percent of the pre-crisis population perished in one of the worst famines of the 20th century. North Korea is once again poised on the brink of famine. Although the renewed provision of aid is likely to avert a disaster on the scale of the 1990s, hunger-related deaths are already occurring and a dynamic has been set in motion that will carry the crisis into the future. North Korea is a complex humanitarian emergency characterized by highly imperfect information. This paper triangulates quantity and price evidence with direct observation to assess food insecurity in North Korea and its causes. We critique the widely cited UN figures and present original data on grain quantities and prices. These data demonstrate that for the first time since the 1990s famine, the aggregate grain balance has gone into deficit. Prices have also risen steeply. The reemergence of pathologies from the famine era is documented through direct observation. Although exogenous shocks have played a role, foreign and domestic policy choices have been key.

Rigorous Speculation: The Collapse and Revival of the North Korean Economy

In this paper we use cross-entropy estimation techniques to construct the underlying data base for a computable general equilibrium model (CGE) of the North Korean economy, starting from incomplete data ridden with gross measurement errors. The cross-entropy estimation approach is powerful and flexible, allowing us to make full use of what information we have in whatever form. CGE modeling forces internal consistency. The end product is a model that incorporates fragmentary information in a rigorous way and allows us to examine the implications of a number of alternative scenarios including rehabilitation of flood-affected lands, liberalization of the international trade regime, and military demobilization.

Sanctioning North Korea: The Political Economy of Denuclearization and Proliferation

As a small country dependent on foreign trade and investment, North Korea should be highly vulnerable to external economic pressure. In June 2009, following North Koreas second nuclear test, the UN Security Council passed Resolution 1874, broadening existing economic sanctions and tightening their enforcement. However, an unintended consequence of the nuclear crisis has been to push North Korea into closer economic relations with China and other trading partners that show little interest in cooperating with international efforts to pressure North Korea, let alone in supporting sanctions. North Korea appears to have rearranged its external economic relations to reduce any impact that traditional sanctions could have. Given the extremely high priority the North Korean regime places on its military capacity, it is unlikely that the pressure the world can bring to bear on North Korea will be sufficient to induce the country to surrender its nuclear weapons. The promise of lifting existing sanctions may provide one incentive for a successor government to reassess the countrys military and diplomatic positions, but sanctions alone are unlikely to have a strong effect in the short run. Yet the United States and other countries can still exercise some leverage if they aggressively pursue North Koreas international financial intermediaries as they have done at times in the past.

Explaining Middle Eastern Authoritarianism

Arab political regimes are both unusually undemocratic and unusually stable. A series of nested statistical models are reported to parse competing explanations. The democratic deficit is comprehensible in terms of lack of modernization, British colonial history, neighborhood effects, reliance on taxes for government finance, and the Arab population share. Interpretation of the last variable is problematic: It could point to some antidemocratic aspect of Arab culture (though this appears not to be supported by survey evidence), or it could be a proxy for some unobservable such as investment in institutions of internal repression that may not be culturally determined and instead reflect elite preferences. Hypotheses that did not receive robust support include the presence of oil rents, the status of women, conflict with Israel or other neighbors, or Islam. The odds on liberalizing transitions occurring are low but rising. In this respect the distinction between the interpretation of the Arab ethnic share as an intrinsic cultural marker and as a proxy for some unobservable is important—if the former is correct, then one would expect the likelihood of regime change to rise only gradually over time, whereas if it is the latter, the probabilities may exhibit much greater temporal variability.

Migration Experiences of North Korean Refugees: Survey Evidence from China

Chronic food shortages, political repression, and poverty have driven tens of thousands of North Koreans into China. This paper reports results from a large-scale survey of this refugee population. The survey provides insight not only into the material circumstances of the refugees but also into their psychological state and aspirations. One key finding is that many North Korean refugees suffer severe psychological stress akin to post-traumatic stress disorder. This distress is caused in part by their vulnerability in China, but it is also a result of the long shadow cast by the North Korean famine and abuses suffered at the hands of the North Korean political regime: first and foremost, perceptions of unfairness with respect to the distribution of food aid, death of family members during the famine, and incarceration in the North Korean gulag, where the respondents reported witnessing forced starvation, deaths due to torture, and even infanticide and forced abortions. These traumas, in turn, affect the ability of the refugees to hold jobs in China and accumulate resources for on-migration to third countries. Most of the refugees want to permanently resettle in South Korea, though younger, better-educated refugees prefer the United States as a final destination.

Modeling economic reform in North Korea

Abstract We construct a computable general equilibium (CGE) model of the North Korean economy and use it to simulate the response of the economy to reform, focusing on three issues: static gains from increased trade, increases in total factor productivity, and the obsolescence shock reduction in the value of the pre-reform capital stock. Empirical results indicate that North Korea is a tremendously distorted economy, and potential income gains from trade liberalization are on the order of 40–50 percent. Even with these income gains, the gap between per capita incomes in the North and South would remain daunting. For the 1990 calibration of the model, the additional capital investment necessary to raise North Korean incomes to 60 percent of those in the South would be