ABSTRACT
This case study describes North Korea’s descent from being the most industrialized part of the Korean Peninsula to being one of the world’s poorest countries, with a fraction of the per capita GNP of South Korea. The North Korean government inherited a strong sense of nation and established strong state institutions, but failed to create prosperity over the long run. It rapidly rebuilt the war-damaged Japanese colonial infrastructure and outpaced South Korea economically until it fully nationalized industry and commerce. It never left a war footing, but approached economic development like a military campaign. In a quest for economic self-sufficiency, it implemented a succession of multi-year plans and collectivized agriculture, but then allowed agriculture and light industry to languish to focus on heavy industry. The Kim family increasingly ruled through a narrow group of family connections and long-time supporters, executing or imprisoning any political opposition. The devastating famine of the 1990s led to a reemergence of private commerce in daily necessities and increasing seepage of information from the outside as Koreans crossed the Chinese border in search of work. The regime has floundered for a solution, but resists political liberalization, having seen its consequences in the former Soviet Union, which collapsed.
